Taylor Wimpey debt - saga nears conclusion?

Taylor Wimpey (TW) shares rose yesterday as a result of talk that TW’s lenders will provide it with a flexible 18-month bridge facility on its debt which can be extended until 2011 if necessary.

TW has a £1.9bn debt mountain. It warned last year that it was likely to breach interest cover covenants in January if it could not reach a deferral agreement with its lenders.

In December it then said it had won vital breathing space to complete refinancing talks before the end of March.

Ongoing uncertainty demolished its share price to a record low of 4½p.

The ThisIsMoney website this morning records that buyers piled in yesterday as a result of “rumours from a man in a hard hat suggested that an agreement had finally been reached”.

The shares firmed to 17p on turnover of 12m shares.

“Dealers have dismissed speculation that a debt-for-equity swap could form part of any deal,” says the website story. “Struggling banks certainly do not want a house builder on their books in the current environment.”