Debt deal boost for store giant

Debenhams, Britain's second largest department stores group, has completed a refinancing of its debts, signing a new £650m ($997m) agreement that will cut its interest bill, it said yesterday.
By The Newsroom
Published 20th Jul 2010, 13:41 BST
Updated 20th Jul 2010, 13:41 BST

The group said the deal comprised a 250m term loan and a 400m revolving credit facility expiring in October 2013, with an option to extend to October 2014.

After hedging a proportion of the debt into fixed rates, it expects interest costs net of fees to fall from about 7 per cent this financial year to about 4.5 per cent during the first full year of the agreement.

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"The new facility puts Debenhams on a strong footing for the future, extending the group's debt maturity horizon beyond three years and, in combination with related hedging, significantly reducing the group's interest charge for the future," said finance director Chris Woodhouse.

"Debenhams continues to be a highly cash-generative and profitable business and we expect to continue our programme of net debt reduction over the coming years."

The agreement will start in April 2011 on the expiry of the existing bank facility. Associated refinancing costs of about 10m will be capitalised.

Related topics:DebenhamsBritain