Tuesday 23 September 2014

Tesco’s off-balance sheet wheeze, courtesy of Goldman Sachs | FT Alphaville

Tesco’s off-balance sheet wheeze, courtesy of Goldman Sachs | FT Alphaville:



"This is not new, but bears revisiting, given recent events.



Between 2009 and 2013, as part of its sale and leaseback plan, Tesco used a series of six special purpose vehicles to issue close to £4bn worth of property bonds. Structured with the help of Goldman Sachs, the programme even won Tesco an award — Risk Magazine’s 2012 Corporate risk manager of the year.



But Nigel Stevenson, a former M&A banker at Kleinworts who now runs his own research shop, reckons the effect of this off-balance sheet financing has been to artificially reduce Tesco’s net debt by around £2bn."



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