Tesco’s Debt-Fueled Growth Sparks Investor, Bondholder Backlash


	Tesco’s Debt-Fueled Growth Sparks Investor, Bondholder Backlash

JICWyllie

6-19-2009 3:07 AM

33 views

tags:

1-debt, 1-strategy, 2-increase, 2-record, 3-reported, 4-uk

JICWyllie says:

Perhaps the great destroyer will be destroyed.

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<div style="margin: 12px 0px; font-family: arial; color: #333333; background: #ffffff; border: solid 4px #e5e5e5; width: 100%; clear: left;"><div class="CM_CTB_Content_Wrap" style="margin: 0px; padding: 0px;background-color: #ffffff;"><div style="border-bottom: solid 1px #dcdcdc; white-space: nowrap; margin-bottom: 8px; background-color: #eeeeee ;background-image: url(http://clipmarks.com/images/source-bg.gif); background-repeat: repeat-x; height: 24px; line-height: 24px; vertical-align: middle; padding-bottom: 4px; color: #666666; font-size: 10px;" ><a href="http://clipmarks.com/clip-to-blog/" title="see clips that are hot right now"><img src="http://content.clipmarks.com/blog_embed/97be1f14-e49b-4301-9c11-5c40c50fbdd6/8BA18380-09CE-4D51-AA32-8CECAA80C041/" alt="" width="19" height="19" border="0" style="vertical-align: middle; margin: 0px 4px; display: inline; border: none; float:none;" /></a>clipped from <a title="http://www.bloomberg.com/apps/news?pid=20601087&sid=acjfPxUl3Bd8" href="http://www.bloomberg.com/apps/news?pid=20601087&sid=acjfPxUl3Bd8" style="font-size: 11px;">www.bloomberg.com</a></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601087&sid=acjfPxUl3Bd8"><P>     June 19 (Bloomberg) --<A href="http://www.bloomberg.com/apps/quote?ticker=TSCO:LN"> Tesco Plc’s </A>decade of international
expansion has pushed debt ratios at the U.K.’s largest retailer
to record levels, endangering the company’s credit rating and
sparking a backlash from fund managers and bondholders.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601087&sid=acjfPxUl3Bd8"><P><A href="http://search.bloomberg.com/search?q=Bradley+Mitchell&site=wnews&client=wnews&proxystylesheet=wnews&output=xml_no_dtd&ie=UTF-8&oe=UTF-8&filter=p&getfields=wnnis&sort=date:D:S:d1">Bradley Mitchell</A>, who helps oversee about $62 billion at
Royal London Asset Management, said he stopped holding Tesco
shares for the first time in 20 years in October as the stock
didn’t adequately reflect the risks faced by the supermarket
operator. Cheshunt, England-based Tesco has <A href="http://www.bloomberg.com/apps/quote?ticker=TSCO:LN">net debt</A> of 9.6
billion pounds ($15.6 billion) and this week sold 431 million
pounds of mortgage-backed bonds secured on commercial property.     </P></blockquote><div style="height: 2px; font-size: 2px; background: #dcdcdc; border-bottom: solid 1px #f5f5f5; margin: 2px 4px;"></div><blockquote style="text-align: left; padding: 0px 8px; margin: 4px 0px 8px 0px; background: transparent; border: none;" cite="http://www.bloomberg.com/apps/news?pid=20601087&sid=acjfPxUl3Bd8">Tesco has increased leverage to pay for expansion in
markets from the U.S. to China as U.K. sales growth slips behind
competitors.<A href="http://www.bloomberg.com/apps/quote?ticker=TSCO:LN"> Borrowings</A> in the fiscal year ended Feb. 28 were
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