Banks agree to relax covenants with housebuilder and allow it £400m fresh debt
Barratt Developments has secured a refinancing package with its lenders that will see its banking covenants relaxed, as exclusively revealed in Building two weeks ago.
According to sources close to the talks between the housebuilder and its lenders, the new covenants mean there is no danger of Barratt breaching its lending agreements.
The deal also includes £400m of fresh bank debt that the company needs to repay the £600m borrowed to fund the £2.2bn takeover of Wilson Bowden last year.
The debt facility was due to expire next year.
The package means Barratt will not have to raise equity in exchange for the covenant waivers, unlike its rival Taylor Wimpey.
It is due to make the announcement at its trading update next Thursday.