Allco Finance said its senior debt had fallen below the A$1bn mark as the troubled Australian asset manager locked in tense negotiations with bankers warned that full-year losses could top A$1.5bn.

The group also said it had secured a short-term reprieve on a A$250m bridge loan, which will now fall due at the end of May, after it repaid A$68m to lenders. That leaves it with total senior debt, including the bridge loan, of A$947m.