Ocado issues £500m corporate bond offering following “strong demand”

Ocado has successfully launched a £500 million bond offering after significantly increasing the size of the offer due to “strong demand”.

The online grocer has now offered £500 million of senior notes, a type of corporate bond, which are due in 2025 withy a coupon of 3.875 per cent.

The offering, which is expected to close on October 8, was raised from £400 million following what Ocado said was strong demand for the bonds alongside receiving a B2 rating from Moody’s Investor Service.

Ocado says it will use its new financing to extend the maturity profile of its debt, refinancing existing notes and providing additional funding for capital expenditure.

Ratings giant Moody’s said: “Considering the expected continuing weak credit metrics and need for ongoing access to additional funds to support the company’s future growth ambitions an upgrade is unlikely in the next two years at least.”

READ MORE: Ocado boss plays down “small pockets of poor product availability”

It comes weeks after Ocado brushed aside concerns surrounding the ongoing problems with the UK’s supply chains due to labour and driver shortages.

Ocado chairman Tim Steiner played down the “small pockets of poor product availability” in the grocer’s stock.

He said that the numbers were no worse than the average of the last 18 months despite the ongoing supply issues hampering the UK’s sector.

“There are small pockets of availability that we’d rather was better on the site and pre-pandemic our levels of overall availability was higher,” Tim Steiner told reporters.

“Sometimes you have to take one brand over another or one pack size over another or one variety over another but there really isn’t anything you can’t get on the website.”

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