Anglo-Dutch publisher and information group Reed Elsevier PLC (ENL, RUK) said Tuesday that it has put in place a $2 billion forward start credit facility, starting May 2010 and maturing May 2012.

The credit facility is multi-currency, with a syndicate of 19 relationship banks, the company said.

A forward start is a loan agreement between a borrower and its lenders that allows the borrower the option to draw down on a new loan facility when an existing loan expires.

The company said that its existing $3 billion revolving credit facility, which matures May 2010, has been reduced in size to $2.5 billion to reflect Reed Elsevier's lower short term borrowing needs.

The forward start facility and the revolving credit facility extend the maturity of Reed Elsevier's revolving credit facilities by two years and provide the company with $2.5 billion of revolving credit facilities to May 2010, and $2 billion from May 2010 to May 2012, the company said.

Reed Elsevier securing this new credit facility should be taken positively by the market said an analyst who asked not to be named.

"It resolves the debt issues so it should be well received. Shares should trade up on the news," he said.

Analysts have been eyeing how Reed Elsevier deals with its debt issues after the company failed to sell its business information unit last year.

In December difficult credit markets and falling valuations had more than halved the expected price tag of Reed Business Information - publisher of New Scientist and Variety magazines, and the company ultimately decided that the terms of the transaction weren't acceptable. The unit had originally been valued at GBP1.25 billion.

At 0803 GMT shares were up 0.4% at 518 pence, in a slightly lower overall London market.

Given banks' ongoing liquidity constraints, the forward-start agreement solves the problem of having to get 100% approval from lenders to extend existing loan facilities.

Barclays Capital, Deutsche Bank AG (DBK.XE) and JP Morgan Chase & Co. (JPM) arranged Reed Elsevier's $3 billion, five-year, revolving credit facility in April 2005.

Company Web site: www.reed-elsevier.com

-By Erica Herrero-Martinez, Dow Jones Newswires; 44 20 7842 9353; erica.herrero-martinez@dowjones.com

(Carol Dean contributed to this report.)