FirstGroup banks on better terms

Bus and rail firm FirstGroup has reduced its bank facilities by around £500 million after agreeing a new funding deal with lenders.

The Aberdeen-based company said it had secured around 890m in a five-year deal with its banks to replace existing revolving facilities which had been due to mature in 2012.

The reduction in finance facilities needed was mainly enabled by two sterling bond transactions in 2009, which raised a total of 550m.

Jeff Carr, group finance director, said: "We timed this exercise to take advantage of the recent improvement in the banking market and are pleased to have achieved attractive pricing, terms and conditions.

"We are delighted by the continuing strong level of support from our relationship banks, recommitting for another five years."

The transport group said the "competitive pricing" on the new facilities will deliver savings on interest costs over the medium term and that the conditions under the new arrangements were the same or more flexible than the existing ones.

Shares in FirstGroup closed up 0.1p at 390.1p, valuing the company at 1.8bn.