Tesco credit rating altered over debt fears

International credit rating agency, Moody's, has altered its outlook on Tesco’s credit rating over fears about the retailer's high level of debt.

It has changed the outlook on Tesco’s A3 rating to negative from stable. Moody’s said that Tesco’s trading is showing "some resilience" to the ongoing recession, but that the company’s debt protection ratios "have suffered from the volatile capital markets and a material increase in operating lease commitments beyond our expectations".

Tesco’s share of the grocery market has fallen to 30.8% from 31.1% over the 12 weeks to May 17 compared with the same period last year, according to the latest figures from TNS.