Taylor Woodrow has issued bonds worth £250m in order to refinance loans more cheaply.
Taywood's failure to sell its St Katharine's Dock residential development in London is believed to be the reason behind the move. It is the first time a UK housebuilder has issued bonds in this way.

A city analyst said: "By issuing bonds, Taywood misses out the bank, which always takes its cut, so it should be cheaper and reduce the average cost of borrowing across the group."

Taywood cancelled plans to sell St Katharine's Dock last November because it could not get the price it wanted – about £236m.

At the time, it blamed the terror attacks of 11 September for the failure of the sale. Bankers were believed to be nervous about lending money to prospective buyers in the uncertain economic environment.

The company will pay those who take up the bonds 6.625% in interest every year, with the principal to be repaid in 2012.

Taywood said the offer had been oversubscribed and that it was delighted with the result.

The bonds are rated BBB plus by credit rating agency Fitch. Taywood is hoping to obtain another rating from Moody's or Standard & Poor's later this year.