Without a plan, junk status looms for Britain's Tesco: Moody's

Tesco (TSCO.L) could see its debt downgraded to "junk" status unless it outlines plans to cut borrowing and improve trading, rating agency Moody's said, raising the prospect of higher financing costs for Britain's biggest grocer. Tesco, already facing a severe slowdown in sales in its stores, said last month it had uncovered what has become a 263 million pound ($420 million) accounting hole, resulting in the suspension of eight senior members of staff and a Serious Fraud Office investigation. Moody's has already cut the supermarket group to one notch above junk, Baa3, and last week also put it on review for a further downgrade after first-half results showed the pension deficit and net debt growing, while trading profits slumped. The agency urged the group to lay out its plans or face further cuts -- a warning to newly appointed Tesco Chief Executive Dave Lewis who said last week investors should not expect a big strategy announcement.

via Business News http://ift.tt/1yMnDvY