Taylor Wimpey sees new financing deal with banks

LONDON (Reuters) - House builder Taylor Wimpey (TW.L) said it is continuing discussions with its banks to renegotiate the conditions of its debt, with a new covenant structure likely to be in place early next year.

In the face of global market turmoil, the company said in statement on Friday the coordinating banks have indicated they intend to replace the current set of banking covenants with a revised set more appropriate to current market conditions.

The cost of debt servicing has soared for other house builders that have renegotiated their debt in recent weeks. Interest levels for both Barratt Developments (BDEV.L) and Redrow (RDW.L) increased about 2 percentage points.

Taylor Wimpey said recent events in the financial markets have reinforced its caution on the short-term outlook for housing and said it was essential to secure a comprehensive financing structure that is robust under all reasonable downside scenarios.

Nationwide building society said on Thursday house prices posted their largest monthly fall since 1991 in September, slipping 1.7 percent to leave the prices 12.4 percent lower than a year earlier.

(Reporting by Simon Meads; Editing by Paul Bolding)