LONDON -- Tesco has raised $2 billion (990 million) of debt in its first dollar-denominated bond issue, a week before the supermarket giant begins an aggressive bid to establish itself in the United States by opening six grocery/convenience stores in southern California under the Fresh & Easy Neighborhood Markets brand, reported The Times.
Tesco said that the bond issue, its biggest for 19 months, reflected an attempt to broaden its investor base in the United States. It added that the proceeds would be used for general corporate purposes as well [image-nocss] as refinancing other short-term loans, according to the report.
Speculation of the debt-raising, jointly arranged by Citigroup and JPMorgan Cazenove, emerged late on Monday night, said the newspaper.
The issue includes 10-year notes paying 5.5% interest and 30-year notes offering a payback of 6.15%, the report said.
Tesco has already revealed plans to invest up to $400 million a year in the United States as it strives to build up a business that it believes eventually could rival the size of its UK operation.
Tesco has announced that the grand opening date for its six stores in Los Angeles, Orange, Riverside and San Bernardino counties (Los Angeles, Anaheim, Arcadia, Hemet, West Covina and Upland) in California is November 8, and that the grand opening date for its five stores in the Las Vegas area is November 14. It said it will open stores in San Diego and Phoenix by the end of the year. The company plans to open 100 Fresh & Easy sites by the end of 2008.
The store openings mark a major milestone for the company, which has spent years researching and planning the format. The format is the result, the company said, of extensive customer research in local U.S. markets where Fresh & Easy researchers spent time in the homes of consumers looking at shopping and cooking patterns.
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