Marston's, the pub company, has formalised an agreement with a syndicate of banks to extend its banking facility.

The update confirms an announcement it made on the situation in December.

The agreement extends its bank facility to August 2013 but reduces the amount it can borrow.

The amount of the facility will reduce from the current £400m to £295m in August 2010, in line with its requirements.

The amount drawn under the current facility as at 4 October last year was around £240m.

But it said the higher margin and fees payable under the new facility will result in the blended cost of interest on the group's net debt will increase to 6.3%, compared to 6.1% in the last financial year.