Drax Group signs new £150m loan

Power generation business Drax has signed a new £150m term-loan facility to help refinance its debt.

The new facility, which comprises an initial £125m facility with an optional uncommitted extension of £25m, adds to an undrawn £258m term-loan facility signed in February which will be used to refinance 2025 debt maturities.

"These combined facilities have two tranches maturing in 2027(1) and 2029(2) and a customary margin referenced over SONIA (Sterling Overnight Index Average) for sterling loans and over EURIBOR (Euro Interbank Offered Rate) for euro loans," the company said.

Drax ended 2023 with net debt of £1.08bn, down from £1.21bn in 2022, giving it a net debt-to-adjusted EBITDA ratio of 1.1, down from 1.6 previously and well below its target leverage ratio of 2 times.