Moody's ups Tesco to stable

Moody's Investors Service said it changed the outlook on the A3 ratings of Tesco plc to stable from negative.

Moody's also said it affirmed Tesco's A3 long-term senior unsecured rating and the prime-2 commercial paper and short-term ratings.

The outlook change primarily reflects the improvements in the company's key credit metrics in the past year and the company's more prudent and transparent financial policy, the agency said.

The stable outlook also considers an expectation that in the current financial year, Tesco will further reduce its net debt and its key credit metrics will move closer to expectations for the rating, Moody's added.

Tesco performed well in its financial year ending February 2011 despite a challenging and competitive retail environment in Europe, the agency said.

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