Man Utd bonds?

Thrugelmir

Well done Reading

Back to off field matters.

From todays Guardian. Without on field success one wonders if this is the next Leeds United.

Attempts by Manchester United's owners to refinance the club's £500m debt could be hampered by a glut of similar high-yield bond offerings, City bond traders said yesterday as the club's banks and executives started the European leg of a series of roadshows designed to spark interest.
At a meeting in Edinburgh's Balmoral Hotel, representatives of the consortium of banks managing the deal – JP Morgan, Bank of America Merrill Lynch, Deutsche Bank, Goldman Sachs and Royal Bank of Scotland – and United executives presented the detail of the bond offer.
This week is one of the busiest launch periods for new bonds in two years, as a series of indebted companies rush to refinance bank debt with investors who have a renewed appetite for risk in the wake of the market meltdown in 2008.
City sources said the fear that interest rates, currently at a historic low, would begin to rise, plus the fact that fund managers had money to invest and were looking to add riskier bets to their portfolio, had combined to create a glut of new issues. But the busy period also means there are plenty of other options for potential investors at a similar price. "One of the things they will be up against is the fact there is a massive amount of supply at the moment, particularly in high-yield bonds. I've counted five other deals pricing today alone," said Euan McNeil, fixed income manager at Aegon Asset Management.
"There is quite a lot of paper to come on to the market. Aside from judging the merits of the Manchester United deal on its own, there is also the relative consideration one has to make on how much money there is to go into the asset class."
Virgin Media, UPC and Ardagh Glass are among six or seven companies to turn to the bond market to refinance their debt this week. The MU Finance roadshow that started in Hong Kong on Monday reached the UK today and will continue in London tomorrow. It then moves to continental Europe and, next week, to the United States.
Through the plan, the Glazer family, who bought United in a controversial leveraged buyout in 2005, hope to refinance the £509.5m in debt currently secured on the club through a series of four loans. The seven-year bond is expected to be priced at between 9% and 9.5%.
That will increase the amount of interest that the club pays on its £500m debt, currently fixed at just over 5%, but will create a mechanism for the Glazers to funnel up to £70m from United's existing cashflow to their holding company to start paying down a £200m hedge fund debt secured on their shareholding. Those so-called Payment in Kind notes are accumulating at a rate of 14.25% a year.The offer document released this week revealed the Glazers had taken £23m out of the club in management fees and loans since 2006 and had made a provision to transfer ownership of the Carrington training ground to their holding company.
While the banks behind the issuance are believed to be confident, the counter view is that the inherent risk in investing in a football club might count against it.
McNeil said: "I think it's fair to say we have not been bowled over by the initial price guidance. It strikes me that at those kind of levels it's quite a good deal for Manchester United but doesn't strike me as a massively attractive deal as an investor. That's not to say we won't get involved but it doesn't strike me as a 'shut your eyes and buy' job.

Ian_W

Of course the bond issuance comes in the wake of a reported £1billion far east take-over bid. Maybe they're hanging back to see if the bonds get taken up?

http://www.newsoftheworld.co.uk/sport/635697/pound1BILLION-CHINESE-TAKEAWAY-AT-MANCHESTER-UNITED.html

http://community.manutd.com/forums/p/89067/828373.aspx

Next Leeds United = My @rse!! :rolleyes:Think of european elite clubs and Man United would be mentioned in the same breath as Real, Barca, Inter, AC, Bayern, Liverpool and more recently Chelsea. Leeds might figure higher than Barnsley but they'd be nearer to them than the above mentioned! Totally different scale in terms of fanbase, trophy count, brand awareness and attractiveness to billionaire backers.

The sharks are no doubt circling the Glaziers and if the bond issue doesn't come off they'll be looking to buy at a buyers price.

None of the above is intended to be anti-Leeds, they were the better side in the FA cup and their fans deserve Premier League football but sadly their club chose wannabes like Ken Bates and Ridsdale - United almost did the same with Knighton in the 90's (he couldn't raise a paltry £10 million!). Whilst most United fans would be glad to see the back of the Glazers, they do at least have more financial oomph than those two.

Thrugelmir

Ian_W wrote: »

Next Leeds United = My @rse!! :rolleyes:

Premier league champions, Carling Cup Winners and runners up in Champions League. Yet only make a profit after selling an £80 million player. :cool:

Football clubs are like dynastys they rise and ultimately fall.

BritRael

metrobus wrote: »

...Especially when so many of their rivals are over taking them on the field of play,the muppets even got stuffed at home by a team playing in the third tier a couple of weeks back....

Yup, what a great win. We absolutely stuffed 'em! Had to laugh when SAF finally agreed to be interviewed after a couple of hours, and complained that the ref had not allowed more 'Fergie Time' Obviously only almost 6 minutes was not enough for him :rotfl:

StevieJ

Ian_W wrote: »

The Manchester franchise is a HUGE global brand though, buddy.

Won't be a problem with profits when the home games are played in Hong Kong - and it's not as far to travel for most of their fans!

Then again some teams now only exist because of a sugar daddy Man Utd could be floated on the stock exchange tomorrow and that 9% yield shared between the club for capex and the shareholders would look very tasty.

StevieJ

dunstonh wrote: »

If they moved to Milton Keynes, most Man U supporters would be closer


.

Then again I don't think many Chelski fans live in Chelsea

dunstonh

Premier league champions, Carling Cup Winners and runners up in Champions League. Yet only make a profit after selling an £80 million player. :cool:

Which is why it looks bad financially. Its like having an interest only mortgage and taking another one out to pay the monthly payments.

Then again I don't think many Chelski fans live in Chelsea

Cheeky. I was born in Chelsea and saw my first game (against Fulham) when I was 6. So, at least I am loyal to to my place of birth and my first team.

Although I do tend to see more Norwich games nowadays (which actually means I am more likely to see a win at the moment!)

metrobus

Lokolo wrote: »

But then drew against Wycombe :D:D

Exactly a team that goes to man united and hands out a beating can not even beat wycombe at home.

IT does not say very much for man utd does it ?

Lokolo

metrobus wrote: »

Exactly a team that goes to man united and hands out a beating can not even beat wycombe at home.

IT does not say very much for man utd does it ?

Nothing wrong with Wycombe. We'll stay up, you just see.

BritRael

Quote:
Originally Posted by Lokolo
But then drew against Wycombe :D:D

metrobus wrote: »

Exactly a team that goes to man united and hands out a beating can not even beat wycombe at home.

IT does not say very much for man utd does it ?

I think it was more a case of 'after the Lord Mayor's Show'.

No disrespect to Wycombe, but the whole club was buzzing after beating manure so it must have been difficult to come down to earth.

I'm just hoping we settle back into it pretty quick because so far the job is only half done and we need to concentrate on the priority of getting out of this league. er...preferably upwards!