Marston's completes £300m-plus refinancing deal

Marstons has bolstered its spending power by more than £300m following a new refinancing deal, with a view to buy back more shares or acquire pub assets.

The new £330m arrangement sees 437 of its pubs transferred into the brewer's securitised portfolio - now around 85 per cent of the group's 2,500-strong pub estate.

Terms of the 'tap issue' - where an existing finance structure is retained and extended - had been finalised at 6.03 per cent, Marston's chief executive Ralph Findlay said today.

"This new arrangement increases the length of our borrowings as secured long term debt versus short term bank debt. It gives us further flexible financing to repay existing short term debt, and then either buy back shares or acquire assets."

Marston's has not bought a large package of pub for some time and while Findlay said the group was happy with its existing business development plans "we will look at opportunities as they arise and have the financial capabilities to move when the situation is right".

"It's pretty remarkable in the current credit climate," he said. The refinancing was "probably the first since the recent credit crunch".

Findlay added: "This proves that the market is still there for well understood financing with the right assets and that banks are ready to lend in the right circumstances."

The pro-forma run-rate EBITDA for the enlarged securitisation group as at June 30 2007 was £147.3m. Marston's will retain £400m of its existing bank facilities.

Following the tap issue only approximately £150m will be drawn against these facilities, providing the group with "significant financial and operational flexibility", it added.