BAA, the airports operator, has completed the £13.3 billion refinancing of its debt, quashing fears that the company could run out of cash this year.

The deal, which had been thrown into doubt by the credit crunch, will allow BAA to reduce its interest payments and to allocate funding to investment projects at its airports.

BAA, which was bought for £10.3 billion two years ago by Ferrovial, the Spanish infrastructure group, has allocated £2.75 billion of the refinancing package for improvements at Heathrow, Gatwick and Stansted.

The money will be used to expand capacity and to improve passenger facilities. A further £255 million will be spent upgrading BAA’s airports at Southampton, Glasgow, Aberdeen and Edinburgh.

The refinancing deal comes as the Competition Commission is expected to recommend the break-up of the company, possibly through the sale of Gatwick and Glasgow. BAA has been struggling with the enormous debt that was taken on at the time of acquisition and analysts said that the company would struggle to survive if the refinancing was not completed.

Colin Matthews, BAA’s chief executive, said: “This is the largest financing of its kind ever completed and the fact that a landmark transaction of this size and complexity has been completed in challenging credit markets is a testament to the strength of the business and the confidence of the financial markets in BAA and its airports.”

The money has been raised by moving £4.5 billion of bonds to a new structure backed by revenues from Heathrow, Gatwick and Stansted.

BAA has raised £4.4 billion from bankers including Banco Santander, HSBC, Citigroup and Royal Bank of Scotland. The European Investment Bank contributed £440 million.

The Competition Commission is expected to disclose its findings tomorrow, with a break-up of the BAA monopoly the likely outcome.

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