UPDATE 2-Wetherspoon targets refinancing by next March

* Says bank debt refinancing is preferred option

* Does not rule out rights issue

* Q1 comparable sales up 0.3 pct

* Confident about FY prospects

* Shares up 2.6 pct

(Adds FD, analyst comment, shares)

By Matt Scuffham

LONDON, Nov 4 (Reuters) - British pubs group JD Wetherspoon (JDW.L) said it expected to complete a refinancing of its bank debt by next March but had not ruled out the possibility of a rights issue after reporting slowing sales growth on Wednesday.

Finance Director Keith Down said the company, which has 738 pubs across Britain, would start formal discussions with its lenders by the end of 2009 over the refinancing of a 435 million pound ($716.5 million) facility due to expire in December 2010.

"We'd expect to have something in place or fairly close by the time we produce our interim results next March," he said.

Down said refinancing the bank debt remains the company's preferred option but added that alternatives for raising cash, including a rights issue, had not been ruled out.

"We have other options in terms of other forms of debt, sale & leaseback and, equally, raising capital through the stock market. We won't rule anything out but it (a rights issue) is not the most favoured option. The simple way is to replace that debt like-for-like", he said.

Down said Wetherspoon would consider resuming dividends, which were suspended in January, following the refinancing.

Shares in Wetherspoon, which have outperformed the FTSE All Share Leisure & Travel Index by 55 percent over the last twelve months, were up 2.6 percent to 477 pence at 0830 GMT.

"We believe that the 2010 refinancing should be achieved without too much grief," said Mark Brumby of Astaire Securities.

Wetherspoon said it was confident in its prospects for the year to July 2010. The consensus forecast for Wetherspoon's full-year pretax currently stands at 70.9 million, according to a Thomson Reuters I/B/E/S poll of 19 analysts.