ASDA - comment

Asda has appointed David Potts as its new CEO. He brings with him a vast array of experience in the retail grocery sector: 40 years at Tesco where he managed the UK/Ireland/Asia operations, followed by 8 years at Morrisons where he also oversaw the turnaround and acquisition by CD&R. Asda's credit story continues to hinge on whether it can successfully achieve sufficient market share and efficiency gains in order to offset its price investments, a plan we think entails material execution risk. In this context, while not a game-changing piece of newsflow, we view the naming of Potts as CEO as a moderately credit-positive event on the margin as it partly mitigates this execution risk.