Marston’s, the brewer and pub operator, confirmed yesterday that it had extended a £400 million debt facility by three years until August 2013.

The refinancing, which had been agreed in principle last month with a syndicate of about half a dozen banks, mostly high street names, appears to remove any continuing uncertainty over future dividend payments, subject to future trading.

The knowledge that it was close to agreeing a deal with the banks enabled Marston’s to avoid having to follow Punch Taverns and Mitchells & Butlers in scrapping this year’s final dividend.

It said that the amount of the facility would reduce from £400 million to £295 million in August 2010, in line with its requirements.

The amount drawn down under the present facility is about £240 million.

Marston’s said that the higher margin and fees payable under the new facility would push the blended cost of borrowings on the group’s net debt of £1.27 billion, up from 6.1 per cent to 6.3 per cent.

Analysts said this implied that the margin Marston’s was paying on the new facility would rise from about 55 basis points over Libor to between 200 and 225 basis points.

One analyst said that the new rate was “lower than many recent refinancings”, adding: “Marston’s was previously paying a very low rate so the much higher figure is not a surprise.”

Mark Brumby, of Blue Oar Securities, the house broker, said: “As Libor continues to fall, the absolute rate of interest paid will similarly reduce. The certainty of having this facility available is, in our opinion, much more important than the marginally increased rate paid.”

The group’s beers include Marston’s Pedigree, Jennings Cumberland Ale and Brakspear, and it has about 2,250 pubs, of which 1,740 are tenanted or leased.

Its 500 managed pubs include such chains as Marston’s Tavern Table, Two for One and Pitcher & Piano. Shares in Marston’s, which employs 12,000 people in England and Wales, rose 1¾p to 127¾p.

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts