Banks to replace Taylor terms

Oct 4 2008 by Iain Laing, The Journal

HOUSEBUILDER Taylor Wimpey has said it is making progress towards securing new borrowing arrangements.

Taylor said banks have indicated they intend to replace existing facilities with a deal “more appropriate to the current environment”. It hopes talks on a new structure can be concluded early next year.

The firm added that recent financial turmoil had reinforced its cautious view of the UK housing market.

Taylor Wimpey is labouring under an estimated debt mountain of £1.7bn and recently reported half-year losses of £1.54n because of £586m of writedowns on its UK land portfolio.

The group will update on current trading in November, but in the meantime it said it remained in compliance with its exiting banking covenants and had adequate banking facilities available.

It added: “In the current environment, securing a comprehensive financing structure that is robust under all reasonable downside scenarios in essential.”

Taylor Wimpey, which is Britain’s biggest housebuilder in terms of homes built, previously said it hoped to have discussions completed before the New Year.

It added yesterday: “These discussions are continuing on a constructive basis and the co-ordinating banks have indicated that it is their intention to agree to replace the current covenants with a revised set of covenants which are more appropriate to the current market environment.”

The company was formed from last year’s merger of Taylor Woodrow and George Wimpey.