Slaughter and May advised Barratt Developments PLC ('Barratt'), one of the largest house building groups in the UK, on the agreement of a complete debt refinancing package.

The refinancing, that was announced on 15 May 2013, provides the group with around £850 million of committed facilities to June 2016 and £650 million to May 2018, with some facilities extending as far as 2021. The package comprises a new £700 million committed bank revolving credit facility available for drawing from May 2013, reducing to £550 million in June 2016 and maturing in May 2018; amendments to Barratt's existing US$80 million private placement notes due in August 2017; and amendments to Barratt's existing £100 million term loan from The Prudential/M&G UK Companies Financing Fund. The new and amended covenants are on attractive terms and reflect a normalised lending package, including a return to an interest cover covenant.

The package also involves the prepayment and cancellation of approximately £152 million of private placement notes issued in 2007 and 2008, and the cancellation of £55 million of historic interest rate swaps. The prepayment of these historic high cost notes has served, in conjunction with the other elements of the refinancing, to reduce the underlying average interest rate of the group's borrowings.

CONTACTS

Financing: Stephen Powell (partner), Caroline Phillips (associate), Laurie Keel (associate), Ivo Stourton (associate); Tax: Sara Luder (partner), Michael Ringer (associate)

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