UK retailer J Sainsbury last Friday announced a major overhaul of its balance sheet, in an attempt to reduce its funding costs and head off the consequences of a potential downgrade to junk. The firm intends to buy back all £1.7bn of its unsecured debt, rated Baa3/BBB-, and launch two new property securitisations, one fixed rate and one floating rate, to raise £2.07bn. It is also negotiating with the rating agencies to alter its existing securitisations, Dragon Finance and Highbury Finance, to delink their credit rating from that of Sainsbury's as sole tenant.
March 03, 2006