The £770million ex-BT phone directory arm said it reached agreement with “significantly more than” the 66 per cent of creditors it needed to increase headroom on its covenants.

Analysts said costs to Yell in higher interest rates and amendment fees equated to £37million a year and a one-off £19million. Its debt facilities must be renewed before April 2011.

One broker said: “We saw the covenants as a relatively small issue, next to the need for Yell to refinance effect­ively all of its facilities in 2010, ahead of their expiry early in 2011.”

To renegotiate covenants now suggested potential concerns about the trading outlook for the next couple of years, he added.

Following its acquisition of Spanish publisher TPI two years ago, Yell racked up about £3.7billion of debt, due to mature in 2011.

Efforts to ease its debt burden also included suspending its dividend payouts over the next couple of years, a £140million annual saving.

Yell shares rose 5.50p to 99.25p.

EXPRESS CITY: IN-DEPTH ANALYSIS OF THE FINANCIAL CRISIS

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