ASDA - comment

The purchase of EG’s UK and Ireland assets, by Asda overshadowed a strong trading quarter. The EG deal has been hanging over bond yields at Asda for some time, but a 20% equity cheque from the TDR and the Moussa brothers will calm concerns about leverage. Asda faces £3.5bn of maturities in H126, so it has limited time to await improving issuance markets. We will be initiating on Asda imminently.