Travis Perkins, the builders merchant, has announced a new banking facility today, perhaps revealing how banks and, by extension major corporations, are having to deleverage.
The new facility is worth £550m and becomes available in April 2013, when the firm's current £800m facility runs out. In other words Travis Perkins' overdraft is soon to get £250m smaller.
The syndicate of banks providing the new facility are led by Barclays Corporate, Lloyds TSB Bank and The Royal Bank of Scotland.
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Travis Perkins is quite clear, the new agreement will "increase the group's funding costs" in line with the tightening credit market. Those additional costs are likely to hit £4m next year.
The agreement runs through to December 2016.
News of the deal has seen TPK shares flat in morning trading at 769.5p. Over the year to date Travis Perkins shares are down 27%.
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