Marston's, the brewer and pub operator, has defied the credit crunch by extending a £400 million debt facility by three years until August 2013.

The extension, which has been agreed with a syndicate of about half a dozen banks, mostly high street names, removes any lingering uncertainty over future dividend payments, subject to future trading.

The looming deadline in August 2010 had prompted suggestions that the group might follow Punch Taverns and Mitchells & Butlers in scrapping this year's final dividend.

However, the company last week announced a maintained dividend and said it was confident of renewing the £400 million facility.

Marston's said this morning that the amount of the facility, of which £240 million is currently drawn down, would reduce from £400 million to £295 million by August 2010.

It said that, with its £1.1 billion of securitised debt and strong cashflows, the extension would "provide an appropriate level of financing".

Paul Inglett, finance director of Marston's, said: “Our recently announced results demonstrated the resilience of our business model and strong cash generation in a difficult year for the industry.

"This extension will provide a flexible financing structure into the longer term as we continue to develop our competitive position in the market place.”

Analysts welcomed the news as recognition of the strength of the group's vertically integrated business model. Mark Brumby, at Blue Oar Securities, said: "Whilst it would be unseemly to gush, this is really excellent news."

He added: "In these straightened times, it signals the various banks’ confidence in Marston’s cash-flows going forward, removes the Aug 2010 date from people’s minds and provides the group with the flexibility that it requires to continue taking market share into the future.

"Marston’s bank debt now has the longest maturity in the pubs sector and the group's decision to maintain its dividend would appear to be vindicated.

"On current numbers we expect Marston’s to both hold its dividend in 2008/09 and to further (albeit marginally) reduce indebtedness."

Shares of Marston's rose by 1.75p to 114.75p in morning trading.

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