BUILDING MATERIALS and insulation specialist Kingspan has raised €330 million in loans from a group of banks to fund future expansion.

The Kingscourt, Co Cavan-based group announced yesterday that it has placed a five-year credit facility with five banks for €330 million.

Kingspan said in a statement that the offer was oversubscribed. The lending banks are IIB Bank and its Belgian parent KBC, Ulster Bank, AIB, Bank of Ireland, French institution BNP Paribas and HSBC.

Investors saw the move as a vote of confidence in the Irish group, whose products are likely to benefit from new building regulations governing energy use and conservation in its main markets.

Davy Research analyst Flor O'Donoghue said it was good news that banks are lining up to loan money to Kingspan in the face of the credit crisis. "They're very cash generative and well positioned as a longer-term story, despite the challenges they've got now," he added.

The deal will bring Kingspan's credit facilities to about €500 million. The new facility partly replaces a similar one which was due to mature in December of next year.

Kingspan finance director Dermot Mulvihill said the group will use the money to fund its expansion plans over the next five years. "The syndicated credit facility provides a platform to continue our stated strategy of expansion by organic growth, strategic investment and acquisitions," he said. The news boosted Kingspan shares yesterday. During the morning the stock was trading at €6.70, an increase of close to 5 per cent on its opening quote of €6.40.

Kingspan has operations in Ireland, Britain, Europe, the US and Canada. In August, it bought Metecno, the second-biggest insulated panel manufacturer in the US, for €75 million.

Chief executive Gene Murtagh subsequently said the current climate meant the group was in a position to get value for money.