Reports this morning suggest that JD Wetherspoon (JDW), the managed pub operator, is in advanced talks over a £500m debt refinancing.
The group is believed to have launched the syndication of a four-year £500m facility arranged by BNP Paribas, HSBC, Lloyds and Royal Bank of Scotland (RBS).
Under this new facility, it is expected to pay about 240 basis points over Libor — more than three times the rate it is paying on its main £435m facility with BNP Paribas, Lloyds and RBS, which expires at the end of this year.
The refinancing would take the facility back to where it was last autumn before the group paid off an £87m US private placement and, according to a report in The Times this morning, could see the resumption of a dividend.
In JDW’ last reported figures, net debt stood at £390m.
But a deal of this kind could see the group pay as total dividend of 13p next year, costing it £19m, said Nigel Parson, analyst at Evolution Securities.
He added that the refinancing would provide JDW with about £130m of headroom to use towards expanding its estate.
The pub group stated recently it was on track to open 50 sites in 2010.
