The 16.25% crystalises when we hit a certain level of debt. I can't remember seeing what that level was though in the prospectus.
ALL issues relating to the bond issue and club finances
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The 16.25% crystalises when we hit a certain level of debt. I can't remember seeing what that level was though in the prospectus.
some reports in the press suggests that the 16.25% rate will come into force, sometime during next year as things are (ie no part of the PIK's is paid)
Didn't think so.
No idea. All I know is that United was making a profit before the Glazers took over. Now we're in debt to the tune of hundreds of millions. Without couching this in financial terminology that is incomprehensible to the layman, how the feck can this be a good thing for Manchester United?
I've never had a satisfactory answer to this that begins: Owing £716 million to creditors is a good thing because...
I was sent this from someone in the newbies:
"Red Football JV Limited breached a convenant relating to the PIK loan which stipulated that Net Debt must be no more than six times that of EBITDA on June 30 2009. Net Debt was in fact 6.2 times that of EBITDA on that date which triggers an increase in the interest rate from 14.25% to 16.25% starting from August of this year. The increase is confirmed in RFJV Limited's accounts although the reason for it was not given."
I've not checked it myself but just passing on the info - would explain why it was even more essential than we first thought to get rid of the PIKs.
I don't think there is anyone who will actually argue that level of debt is a good thing.
I have in the past argued that debt in itself is not necessarily a bad thing but that is a completely different discussion.
Interesting stuff. Top marks to whoever spotted that - spotter's badge, Clive.
Really. So they will ban United, Chelsea, Liverpool, City, Juventus, AC Milan, Real Madrid and more from Europe will they?
Until these threaten to withdraw from Uefa and set up their own league, that is.
I fecking hate Uefa, they're thick as pigshit.
Until these threaten to withdraw from Uefa and set up their own league, that is.
I fecking hate Uefa, they're thick as pigshit.
Some Austrian Newspapers are suggesting that we might be forcibly relegated...where do they get that shit from??
Presenting the pricing details for the Manchester United’s senior notes offering.
Emphasis ours.
Issuer: MU Finance plc.
Sec Type: Senior Secured Notes (144A/RegS, no Reg Rights)
Maturity: February 1, 2017
Face amount: £250,000,000 | $425,000,000
Proceeds: £245,222,500 | $416,776,250
Coupon (s/a): 8.750% | 8.375%
Reoffer price: 98.089 | 98.065
Yield: 9.125% | 8.750%
Reoffer spread: UKT 4% Sep-16 +569bp | UST 3.25% Dec-16 +568bp
Call Schedule:
01-Feb-13: 108.750 | 108.375
01-Feb-14: 104.375 | 104.188
01-Feb-15: 102.188 | 102.094
01-Feb-16: 100.000 | 100.000
Min Denom: £50k + £1k | $100k + $1k
CUSIP: | 144A: 553799 AA5
Reg S: G63262 AA0
ISIN code: XS0479707688 | USG63262AA01 (RegS)
XS0479707845 | US553799AA50 (144A)
Interest Pay Dates: February 1 and August 1
Beginning: August 1, 2010
Ratings: None
Trade date: 22-Jan-10
Settlement date: 29-Jan-10 (T+5)
Underwriters: JPM (b&d), BAML, DB, GS, RBS // Co-Manager: KKR
FT Alphaville They think it’s all over…
Emphasis ours.
Issuer: MU Finance plc.
Sec Type: Senior Secured Notes (144A/RegS, no Reg Rights)
Maturity: February 1, 2017
Face amount: £250,000,000 | $425,000,000
Proceeds: £245,222,500 | $416,776,250
Coupon (s/a): 8.750% | 8.375%
Reoffer price: 98.089 | 98.065
Yield: 9.125% | 8.750%
Reoffer spread: UKT 4% Sep-16 +569bp | UST 3.25% Dec-16 +568bp
Call Schedule:
01-Feb-13: 108.750 | 108.375
01-Feb-14: 104.375 | 104.188
01-Feb-15: 102.188 | 102.094
01-Feb-16: 100.000 | 100.000
Min Denom: £50k + £1k | $100k + $1k
CUSIP: | 144A: 553799 AA5
Reg S: G63262 AA0
ISIN code: XS0479707688 | USG63262AA01 (RegS)
XS0479707845 | US553799AA50 (144A)
Interest Pay Dates: February 1 and August 1
Beginning: August 1, 2010
Ratings: None
Trade date: 22-Jan-10
Settlement date: 29-Jan-10 (T+5)
Underwriters: JPM (b&d), BAML, DB, GS, RBS // Co-Manager: KKR
FT Alphaville They think it’s all over…
BBC say bond issue has been completed with 504 million raised and interest payments of 45 million. Half in dollars half in pounds.
If it has been over subscribed so quickly they probably had the interest rate on the high side.
The bond was sold in two tranches, one of £250m with a coupon rate - or interest rate - to bond holders of 8.75%, and another tranche of $425m with a coupon rate of 8.375%.
So is the bond issue good or bad?
Someone explain in simple English please
Someone explain in simple English please
It's lowered our interest payments and bought the Glazer's time. Our financial situation is still on the precipice however.
It buys them more time but it could be just more time for the inevitable.
OK now find out who bought them- then start complaining!
So it is done - seems all the bonds were sold pretty quickly which indicates that some people with deep pockets are confident about the future financial situation of the club. Will be interesting to see if we find out who exactly has bought them.
Some things are still unclear to me, like exactly how much cash the Glazers can use to pay off the PIK loans - there is a direct provision for £70m to be used but there have been a few interpretations which suggest that they might be able to use more.
Some things are still unclear to me, like exactly how much cash the Glazers can use to pay off the PIK loans - there is a direct provision for £70m to be used but there have been a few interpretations which suggest that they might be able to use more.
It looks as if we've got the Glazers until 2017, atleast.
Ffs
It's certainly good news in terms of our financial situation. I wonder how the UEFA will react to it? Its pretty unique in the football world I reckon. Lets hope the Glazers will sell before 2017..
Well it looks like United won't make them bankrupt until 2017.
We'll just have to make sure we get rid of the feckers won't we?
Rood, I presume the idea is to continue to grow the club and increase profit, which will pay the debt servicing and by 2017, pay off the main debt itself (or pay some of it off and the rest be re-financed again)
But what about the team, and specifically transfer money? If they have borrowed another £70million to put in... that's for one window? For the next 7 years? How can this possibly work?
The interest rate is far higher than any bank would give you, so its hardly surprising people with spare cash have invested.
If the banks will let them it would be good to pay off the PIKs first. If the assets in the club are sufficient they should be able to pay off the PIKs and retain some of the bank loans against the assets.
Bonds are really much different from shares when you think about it.
Presuming the $ rate is on an upward trend it makes sense to have half of the loans in dollars. If it was to plummet we would have some serious exchange losses on $250m.
It aint gonna happen. It would be suicide for the champions league.
I thought their emphasis was going to be on wages as a % of turnover but I have done absolutely no research into it.
They'll find a compromise and only exclude clubs with >500m worth of bonds
Preumably these are the same sort of deep-pocketed people who thought sub-prime mortgages were a canny investment.
Hardly a ringing endorsement of the Glazer business plan.
MAN UTD BOND ISSUE OVER-SUBSCRIBED
By Simon Stone, Press Association Sport Chief Football Writer
Manchester United's controversial £504million bond issue has been over-subscribed.
United officials, including chief executive David Gill, have been on a whistle-stop world tour to drum up interest in the bonds, which will run until February 1, 2017.
Plenty of doubt was cast over the prospects of controversial American owners the Glazer family being able to sell the bonds in a difficult market, and there were others who suggested the interest rate would have to hit nine percent in order to achieve their target.
In the end, £250million sold in sterling has been pinned to a rate of 8.75%, with the remainder in dollars going for 8.375%.
It means the overall outlay will amount to just under £45million in interest during the course of the bond, money that will come out of group operating profits, before depreciation and amortisation of intangible fixed assets, that are currently in excess of £91.3million.
That figure is not touched by either the world record £80million sale of Cristiano Ronaldo to Real Madrid, or the current interest bill of £41.9million lodged against the club, that is actually due to rise because of the bond.
A spokesman for the family claimed the deal brought a "transparency" to United's finances for the next seven years.
The situation is not totally straightforward given the numerous clauses within the prospectus issued for the bonds, which appear to be aimed at allowing the Glazer family to take £70million out of the cash raised by the club to set against the controversial payment-in-kind notes, whose interest is due to rise to an eye-bulging 16.25% next year.
However, the idea is clearly for the Glazers to reduce their overall interest bill, rather than just United's.
And by converting the money owed to banks into a bond, it means the club will be free of the potentially strict financial conditions imposed by lenders.
Critics will argue that the only reason big investors are interested is because of the interest rates and that in order to guarantee payment, United have had to confirm they would be willing to sell their Carrington training complex and iconic Old Trafford stadium.
The vociferous anti-Glazer faction among the United support will not be won over though and have launched a green and gold 'Love United Hate Glazer' campaign ahead of Saturday's game against Hull at Old Trafford.
By Simon Stone, Press Association Sport Chief Football Writer
Manchester United's controversial £504million bond issue has been over-subscribed.
United officials, including chief executive David Gill, have been on a whistle-stop world tour to drum up interest in the bonds, which will run until February 1, 2017.
Plenty of doubt was cast over the prospects of controversial American owners the Glazer family being able to sell the bonds in a difficult market, and there were others who suggested the interest rate would have to hit nine percent in order to achieve their target.
In the end, £250million sold in sterling has been pinned to a rate of 8.75%, with the remainder in dollars going for 8.375%.
It means the overall outlay will amount to just under £45million in interest during the course of the bond, money that will come out of group operating profits, before depreciation and amortisation of intangible fixed assets, that are currently in excess of £91.3million.
That figure is not touched by either the world record £80million sale of Cristiano Ronaldo to Real Madrid, or the current interest bill of £41.9million lodged against the club, that is actually due to rise because of the bond.
A spokesman for the family claimed the deal brought a "transparency" to United's finances for the next seven years.
The situation is not totally straightforward given the numerous clauses within the prospectus issued for the bonds, which appear to be aimed at allowing the Glazer family to take £70million out of the cash raised by the club to set against the controversial payment-in-kind notes, whose interest is due to rise to an eye-bulging 16.25% next year.
However, the idea is clearly for the Glazers to reduce their overall interest bill, rather than just United's.
And by converting the money owed to banks into a bond, it means the club will be free of the potentially strict financial conditions imposed by lenders.
Critics will argue that the only reason big investors are interested is because of the interest rates and that in order to guarantee payment, United have had to confirm they would be willing to sell their Carrington training complex and iconic Old Trafford stadium.
The vociferous anti-Glazer faction among the United support will not be won over though and have launched a green and gold 'Love United Hate Glazer' campaign ahead of Saturday's game against Hull at Old Trafford.
The small print of Red Football Ltd’s bond prospectus shows that the Glazers have structured the issue to allow them to take at least £20m of dividends out of the club every year. An additional, so far unnoticed, clause allows a further £25m to be paid out in dividends at any time. Add these payments to the £70m already known about, the Carrington deal and “management fees” and at least £220m of the club’s cash will flow directly to the Glazers between 2010 to 2017.
Am I right in thinking that the Glazers being successful with the bond thing is bad news for us in terms of trying to get rid of them, but good news for us in that it means the club is slightly less cripled and gives us a slightly more to spend on players?
just about, yes
This should be our main concern.
we're rich..?
Yep, all our problems are over
So now just sit back, relax, and watch the trophies come flying in.
The worst part is gone thankfully..for now...
Not really. The bastards do own the club. I'm more worried about how we will repay the bond when it matures.
£504 million bond "very bad news" for United | United Rant
Not looking good. These guys need to be gotten rid of fast.
Not looking good. These guys need to be gotten rid of fast.
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