Fitch downgrades Tesco

Fitch Ratings said it downgraded Tesco plc’s long-term issuer default rating and senior unsecured rating to BBB- from BBB, resolving the Rating Watch negative assigned Sept. 22.

The short-term issuer default rating also was downgraded to F3 from F2.

The outlook is negative.

The agency also downgraded Tesco Corporate Treasury Services plc’s senior unsecured debt to BBB- from BBB and short-term issuer default rating to F3 from F2.

The downgrades reflect Tesco’s continued loss of competitiveness its core U.K. operations, with profitability further impacted by the accounting adjustments associated with the group’s recognition of commercial income, Fitch said.

The agency said it expects further pressures on volumes and pricing, coupled with the significant operational leverage inherent in the business, leading to a structural reset of margins in the U.K. business.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.