Debenhams has confirmed that it has completed the refinancing of its borrowing facilities, with the signing of a new £650m credit facility.
The facility comprises a £250m term loan and a £400m revolving credit facility expiring in October 2013, with an option to extend to October 2014. Following a proportion of the debt being hedged into fixed rate finance, the chain said it is anticipated that the interest cost net of fees will fall from 7% in the current financial year to 4.5% in the first full year of the new facilities.
The new facility will start in April 2011.
The lead arrangers and bookrunners were Barclays Capital, Lloyds Banking Group and Royal Bank of Scotland.
Chris Woodhouse, finance director of Debenhams, said: “We are delighted to have completed the refinancing well in advance of the expiry of the existing facility in April next year. 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.
“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.”