Private label consumer goods manufacturer McBride (MCB) has refinanced its existing banking facilities to buy back previously issued bonds and support its “Repair, Prepare, Grow” strategy.

These actions will lower the cost of the Group’s debt financing from the financial year starting on 1 July 2017 by approximately £2m per year.

It has replaced its existing €140m multi-currency revolving credit facility with a five year €175m facility with a maturity of June 2022, resulting in a 5 bps reduction in both margin and non-utilisation fees.

The bank facilities are provided by a syndicate of HSBC, KBC, Bayern LB, BNP Paribas and Barclays.

It will use the new facilities to buy back its existing $50m 5.51%1 2020 US Private Placement Notes and $40m 5.38%1 2022 USPP.

The repayment will incur an exceptional finance charge of £13m as a result of ‘make whole’ payments to USPP note-holdings and additional USPP closure costs.

The group’s overall ongoing average cost of debt, after the repayment of the USPP, will reduce by approximately 310bps 4 to 150bps.

Chris Smith, CFO of McBride, commented: “As we prepare for the Grow phase of our strategy, we have secured an improvement in the cost, flexibility and duration of our banking facilities. The completion of this exercise represents another important milestone in the delivery of Repair, Prepare and Grow and reflects the strong ongoing support from our chosen banks.”

Broker Peel Hunt raised its price target on the company from 205p to 215p to reflect the expected 5% boost to earnings.

The broker wrote: ”The new facility also provides greater flexibility should the company make infill acquisitions. The company will update on full-year trading on 11 July - we expect an in-line statement, with the key feature an improvement in margins of c60bp. The company is successfully managing the rising input cost environment, albeit passing on price increases is not easy in some regions.”