Fitch lifts Tesco view to stable

Fitch Ratings said it revised Tesco plc’s outlook to stable from negative while affirming its long-term issuer default rating and senior unsecured rating at BB+.

Fitch also said it affirmed the short-term issuer default rating and short-term debt ratings at B.

The agency also said it affirmed Tesco Corporate Treasury Services plc’s senior unsecured debt at BB+ and short-term debt rating at B.

The outlook revision reflects an expectation of a progressive recovery in Tesco’s core United Kingdom market after a stabilization in the retailer’s operating performance for the financial year that ended February 2016, Fitch said.

Fitch also said the stable outlook reflects the strengthening of the group’s balance sheet and financial flexibility, mainly achieved by the divesture of Tesco’s Korean operations and other capital preservation measures.

The ratings consider the execution risk associated with turning around the U.K. operations in a competitive and highly challenging market environment, the agency added.

© 2015 Prospect News.
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