Taylor Wimpey makes informal agreement with banks

Taylor Wimpey has inched forward on the convoluted pathway to a sort-out of its financial headaches – it has informally agreed key terms with its banks and other senior creditors for the restructuring of its finances.

That in turn has allowed for progress with negotiations with bondholders.

Over the weekend, the Financial Times revealed: “The house builder and its leading senior lenders have agreed informally to a deal where the senior debt maturities are extended to 2012 from dates over the next three years.”

The latest progress should generate much hand-rubbing and glee amongst the lenders as they will get 5% more than they previously raked in.

The deal is not quite in the bag, however, as some elements of the new arrangements are still to be resolved in so far as the banks themselves have still to secure the approval of their credit committees, says the FT.

TW last reported on progress on its convoluted loans on Christmas Eve, reporting to a near-non-existent Stock Exchange on that day that lenders had agreed to defer covenant testing until March while new financial terms were resolved.

As the lenders to house builders know that they now have the upper hand, they are demonstrating this power by racking-up the arrangement fees they demand on everything... and TW is expected to suffer from this bout of client sublimation.

Last week Bovis Homes paid an arrangement fee running to 3.5% of its refinancing package – that figure was double the re-arrangement demands put on Barratt Developments in summer even though Barratt, at the time, was refinancing a much larger debt with a simpler path to clearing it off in the future.