Asda Cut Deeper Into Junk on Sale-and-Leaseback Deals, Price War

• Asda, the UK value supermarket chain, has been downgraded deeper into junk status by Fitch Ratings, largely due to recent sale-and-leaseback transactions, including a deal with US asset manager Blue Owl Capital. This downgrade reflects ongoing financial challenges faced by the retailer.
• The downgrade is significant as it indicates heightened financial risk for Asda, which is struggling with declining sales and market share. The company's strategy to raise funds through asset sales suggests a critical need to address its financial stability amid a competitive retail environment.
• This situation highlights a troubling trend in the retail sector, where companies like Asda are resorting to selling assets to manage debt and maintain operations. The reliance on sale-and-leaseback arrangements may signal deeper issues within the company, as it attempts to navigate a price war and shifting consumer preferences.

— via World Pulse Now AI Editorial System