Asda buyers in £2.75bn record sterling junk bond sale

Mohsin and Zuber Issa

Blackburn-based billionaire brothers Mohsin and Zuber Issa and private equity firm TDR Capital have issued the largest-ever sterling junk bond as investors snapped up their £2.75 billion debt sale to help finance the £6.8 billion acquisition of Leeds-based Asda from Walmart.

Market reports said the £2.75 billion high-yield bond sale drew more than £8 billion of orders — allowing the securities to be priced at a 3.25% coupon on the £2.25 billion secured notes tranche and 4% on a riskier £500 million unsecured bond.

“We are pleased to have secured debt financing for the acquisition of Asda at attractive rates, following exceptional levels of investor demand,” said the Issa brothers and TDR in a statement.

“The debt financing forms part of a robust capital structure that we are putting in place for Asda, to support and accelerate the growth strategy for the business.”