Lenders for the department store chain’s £650m facility, made up of a £250m long term loan and £400m in revolving credit, have reduced the group’s cash interest rate by 0.50 per cent to four per cent.
The lenders Barclays Capital, Lloyds Banking Group and Royal Bank of Scotland have extended the terms to October 2015 with a further option to extend to October 2016.
The refinancing costs will be £3.3m.
The ability to raise cheaper money appears to reflect Debenhams’ recent performance, which has seen like for like sales up three per cent compared to the first half of 2010.
Finance director Chris Woodhouse said he was “delighted” at securing Debenhams’ medium term funding.
However, the company saw its share price edge down in early trading. Debenhams said last month it would meet forecasts for yearly profit as it defied the general doom and gloom in the retail sector with a jump in second-half sales.
The company said that consumers were still buying “treat” items like cosmetics while childrenswear was also performing well.
Debenhams said sales at stores open more than a year, excluding VAT sales tax, were up 1.5 per cent in the 17 weeks to 25 June. It forecast year-end net debt of about £400m.