Debenhams signs refinancing deal

Debenhams has completed the refinancing of its debts ahead of schedule by signing a £650m credit facility.

Britain's second-largest department stores group said the new deal, which will start in April 2011 when its existing facility expires, would comprise a £250m loan and £400m revolving credit facility that expires in October 2013. Interest fees are set to fall from 7 per cent to 4.5 per cent.

Chris Woodhouse, the finance director, said yesterday: "The new facility puts Debenhams on a strong footing for the future ... Debenhams continues to be a highly cash-generative and profitable business and we expect to continue our programme of net debt reduction over the coming years."

Debenhams' net debt last year was £927m. In April, it said this had been reduced by 45 per cent to £512m, largely as the result of a rights issue.