Pete Redfern, the chief executive of Taylor Wimpey, has confirmed that there will be no debt-for-equity swap with its lenders as a condition of its refinancing deal

As revealed by Building last week, he said the option of its lenders taking a slice of the company in return for agreeing to refinance its £1.55bn debt pile “had not been discussed”.

According to a source close to the talks, lenders will instead receive warrants that entitle them to buy shares at a specified price.

At a trading update on Tuesday, the company described talks as constructive and indicated that a deal would be done by the end of March, when a deferral period for a covenant test comes to an end. The lack of news about the progress of talks depressed its share price by 21%.

The group announced that it had reduced its debt from £1.9bn to £1.55bn as a result of cost cutting. It also said it will make further land writedowns owing to the “absence of any improvement to market conditions”.

The firm said it completed 13,394 homes in 2008, down from 20,790 the previous year. Average selling prices were £171,000, down from £188,000 in 2007.

Net private reservations for the second half of 2008 were also lower, averaging about 137 a week, compared with 225 over the same period the previous year.