Taylor Wimpey said today that its bankers had ‘indicated their intention’ to agree to replace its current covenants with revised terms ‘which are more appropriate to the current market environment’.
It said in a statement to the Stock Exchange today that its discussions with its bankers were progressing ‘constructively’ but were unlikely to complete before the New Year as stated in its interim results earlier this year.
It said: ‘The recent unprecedented events in world financial markets have reinforced the board's cautious view of the short term outlook for UK housing. In the current environment, securing a comprehensive financing structure that is robust under all reasonable downside scenarios is essential.
‘To that end the Board has decided to extend the current discussions with debt providers to include applicable Eurobond holders, which will prolong the negotiation process. As a consequence, it is now likely that a revised covenant structure will be concluded early next year before the announcement of our preliminary results.’
It said it update the market on the negotiations in its interim management statement next month. It also said it ‘remains in compliance with its existing covenant package and has adequate facilities available’.