Manchester United Financial Thread

I no. LOVE UNITED, HATE GLAZER.

Manchester Utd. Loans Gain on Reports of Refinancing (Update1)

Manchester Utd. Loans Gain on Reports of Refinancing (Update1) - Bloomberg.com



By John Glover and Tariq Panja

Jan. 4 (Bloomberg) -- The price of loans to Manchester United Ltd. rose after reports the Premier League soccer champion is considering selling bonds to refinance debt.

The club’s 520 million pounds ($840 million) of senior loans rose about 3 pence to 97 pence in the pound, said Alex Moss, head of high yield at Insight Investment Management in London.

The Glazer family of the U.S., which bought the club in a 790 million-pound buyout in 2005, plans to settle its 14.25 percent so-called payment-in-kind loan for which the family is responsible, according to reports in the Sunday Times and the Financial Times. The outstanding PIKs total about 202 million pounds, according to data compiled by Bloomberg.

“That the new owners could take on so much debt to buy a football club is a reminder of how widely the monetary madness spread in 2006/2007,” said Kit Juckes, chief economist at ECU Group Plc in London. “That they might be able to issue a new bond and start cleaning up their finances is indicative of how far quantitative easing policies have taken us.”

Sales of high-yield bonds soared in the second half of last year, as the market for debt rated lower than BBB- at Standard & Poor’s and Baa3 at Moody’s Investors Service reopened after a two-year hiatus. Under the terms of the PIK loan, hedge funds that own the securities can appoint directors if the club’s performance deteriorates below a certain level, the Sunday Times said.

Debt Payments

PIK notes allow borrowers to pay interest with more debt instead of cash.

A spokesman for the Glazers, who asked not to be named, declined to comment. Philip Townsend, a spokesman for Manchester United in Manchester, also declined to comment.

Under the Glazers, United has been among European soccer’s most successful teams, winning three successive league titles since 2007 as well as the European Cup in 2008. Alex Ferguson, aged 68, has been manager since 1986.

“There is some key-man risk with Ferguson, who presumably will bow out at some point,” said Moss at Insight. “And the club’s financial performance depends on its performance on the field.”

United’s parent company Red Football Joint Venture Ltd. said in an annual filing in April that its loss narrowed to 43.2 million pounds from 57.8 million pounds for the year ending June 2008. The company paid 68.8 million pounds in net interest, according to the filing.

Cup Loss

United suffered a 1-0 loss in the F.A. Cup third round to Leeds, a team ranked 43 places below United. The defeat was United’s first third round elimination since 1984.

The club’s chances of collecting a record 19th title this season were dented pre-season after former world player of the year Cristiano Ronaldo moved to Real Madrid and Carlos Tevez opted to sign with crosstown rival Manchester City.

The club didn’t use the proceeds of Ronaldo’s record 80 million-pound trade to recruit a marquee player. Ecuadorian winger Antonio Valencia, a 17 million-pound capture from Wigan, was the most expensive recruit, while striker Michael Owen and Frenchman Gabriel Obertan also joined. United said more funds were available but Ferguson decided against using them.

Last year United announced a four-year sponsorship with Aon Corp. that is worth 80 million pounds, according to U.K. media reports.

“They should monetize that,” said Stephen Schechter, founder and chief executive officer at Schechter & Co. in London, who’s helped teams including Newcastle, Southampton and Germany’s Schalke raise money. “Get payment up front and pay down the debt so that way you are not impugning the birthright of Manchester United.”

The club could also securitize gate receipts from its 76,000-seat stadium, he said.

To contact the reporters on this story: John Glover in London at johnglover@bloomberg.net; Tariq Panja in London at tpanja@bloomberg.net.

Its all getting a bit confusing for me. Are we actually paying the debt or just contstantly paying off the interest on the debt?

The amount of money we have paid in interest is ******* ridiculous but are we even making any dent in this debt at all?

plain and simple answer to that is ...no.

not one penny has been paid off the debt. there never will be.
if i'm right the yearly interest is also not even being paid in full either.
over £100m paid out in interest so far.

If all the alledged "fake" fans all put in two quid we could pay off a large chunk of this "debt".

Well, if they issue this bond, fans - fake and real alike - will be able to put the money where it matters, although it will benefit the Glazers more than the club, but then again having hedge funds able to appoint directors to the club just seems ugly to me.

I thought I'd read we had paid over 200 million in interest payments so far? Or is that this year alone?

not sure of the exact figures mate, you could well be right.

for example if the interest was £40m a year (it's lots more than that i think) but x that by 5 years and you'll get £200m.

disgusting amounts that's being bled from united and the fans either way.

Glaziers STILL need to go

And people still cant spell it properly

Tried to find the article, sure I posted in a debate I was having with you another time, but cant so **** it.

How a club that was debt free can have come to this is a disgrace.

As a club we have pushed on so far, but what happens when the success stops, and it will, unable to compete financially with the worlds top clubs and finding ourselves going down the same road as the scouse.

And people still don't give awards for internet spelling / grammar

It's rediclous, discusting and should have never been allowed to happen!!!!:fyou: I can't understand why some fans still stick up for them?!?!:fyou:

Love United
Hate Glazer

Fight For United - Manchester United Supporters website.

im after one of stephens medals.

Ah, just reply to one of his posts, immediately that qualifies you as "biting" aparently should get a medal...

i want a medal too :frown:

Don't worry WATPOAE; it's just the thick yorkshire sheep that can't spell Glazer. They are living behind everyone else, afterall.

(JUST JOKING NOXIOUS, I LIKE YOU REALLY).

I was born in yorkshire brummie ****

I have been scared from the off - just like some big buy to let model the way it is financed - and along comes the crunch - we have been misled about the size of the problem for ages - by all the management - even SAF who must know the reality but professionally toes the party line

No - I do not believe that we will go bust - but we should not be in this position - if the debt increases we will not be a viable buy for anyone other than a Sheik - I wish we had been bought my the bitters guy - what have they done to deserve that luck - no history - no brand - ether way I think this is going to be a lean few years

A lot of people talk about wanting to be bought by rich arabs like Citeh but I personally still wouldn't be happy and never will be, being owned by someone rich who can give us money for transfers would be good but I'd rather be owned by the people of Manchester- the way it should be. I hate the fact that the club has to be owned by one person(s) for profit, it's not the way football should be.

**** modern football