Morrisons has slashed its debt by nearly 40% following major debt restructuring, cutting its bill from £6.2bn to £3.8bn.

The restructuring included extending its term loan facilities from 2027 to 2030 and decreasing both the cost of the debt and the overall debt level. Morrisons has also extended its revolving credit facility to 2030.

The shift follows an upgrade from credit rating agency Moody’s, which increased the credit rating of Morrisons’ owners, Market Holdco 3 Limited, from B2 to B1.

The upgrade reflects the grocer’s reduced debt load and extended debt maturities, with Moody’s also changing its outlook from “negative” to “stable”.

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Morrisons chief financial officer Jo Goff said: “I’m very pleased with the rapid progress of our deleveraging programme and our debt levels are now around 40% lower than in October 2021, whilst our retail estate remains over 80% freehold.

“Our operational progress is steadily improving as we invest in our colleagues, our prices, our store and logistics estate, our loyalty programme and our fresh food manufacturing operations.

“These investments are a central part of our plans to build a stronger, more competitive and more distinct Morrisons with traditional values powered by modern retailing practices.”

The news follows the supermarket’s latest results, which saw sales nudge up during its third quarter. Morrisons revealed at the time that it had secured a £331m ground rent deal with real estate investor Song Capital, on 75 of the retailer’s stores.