ALL issues relating to the bond issue and club finances

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RedRichio said:
Yes, because the bonds are not repayable until 2017 giving the club breathing space.
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But what was the term on the original loan then? Did they have to pay back those £500M soon? Was it really necessary to pay back that original loan this year?

I also seem to remember that there's a good chance the refinancing in 2017 could be at better terms than there are now, at a smaller intrest rate. Is that true?
 
RedRichio said:
I'm really struggling to find negatives here. Worst case scenario is they have refinanced, but in doing so have demonstrated an unwillingness to take money from united to deal with that personal debt. If you believe they will take the dividends in future then at least the debt interest will be lower. Either way the club now appear to have the money to significantly strengthen the squad. Best case scenario is that they are planning to sell and have either already taken money from a productive owner or are doing the housekeeping described above. At worst we have more money for players, at best they could feck off.
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I don't disagree with that, the only downside being if the debt being repaid is being replaced by new debt albeit at a lower interest rate, it is still a better position though
 
King_Eric said:
But what was the term on the original loan then? Did they have to pay back those £500M soon? Was it really necessary to pay back that original loan this year?

I also seem to remember that there's a good chance the refinancing in 2017 could be at better terms than there are now, at a smaller intrest rate. Is that true?
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I'll respectfully defer to one of our resident experts on those points!
 
King_Eric said:
But what was the term on the original loan then? Did they have to pay back those £500M soon? Was it really necessary to pay back that original loan this year?

I also seem to remember that there's a good chance the refinancing in 2017 could be at better terms than there are now, at a smaller intrest rate. Is that true?
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The original senior debt was repayable in 2013 - the interest rate ended up being pretty much the same as they now pay on the bonds.

I dont have a crystal ball so I cant tell you what happens in 2017!
 
robertsoncrusoe said:
:lol::lol::lol:

Where do they get their money???

Money's all fungible ( look it up ). What a brain washed dupe!
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Are you completely unaware that they own more than just United? They may be borrowing the money or they may have leveraged it against one of their other businesses. It doesn't matter though because it has been made clear that it will not be paid back in any way by the club.
 
RedRichio said:
I'm really struggling to find negatives here. Worst case scenario is they have refinanced, but in doing so have demonstrated an unwillingness to take money from united to deal with that personal debt. If you believe they will take the dividends in future then at least the debt interest will be lower. Either way the club now appear to have the money to significantly strengthen the squad. Best case scenario is that they are planning to sell and have either already taken money from a prospective owner or are doing the housekeeping described above. At worst we have more money for players, at best they could feck off.
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There are no negatives - even the likes of Crerand seem to realise this which says a lot!
Only the complete loonies like robertsoncrusoe still refuse to accept it - fred is also conspicuous by his absence!
 
Eyepopper said:
Interesting...
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Wait...

I thought the PIKs were never secured directly to the club, and that they basically had nothing to do with the club. Why would paying off the PIKs affect the prize of United then?

To use the author of that articles words, it wouldn't be like cleaning out your house before selling it, it would in fact be cleaning out another house you own before selling the original house.
 
The Taurean said:
Regarding the 500+million bond, is the money taken out of the club to service it annually corresponds to the interest amount only or an amount more than that?
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We just pay the interest on the bond (around 8%) - the capital will be due in 2017.

Of course, we have heard rumours that the Glazers plan to buy back some of the bonds as well. Apparently they were looking to repurchase around £50m worth.
 
Dyslexic Untied said:
Wait...

I thought the PIKs were never secured directly to the club, and that they basically had nothing to do with the club. Why would paying off the PIKs affect the prize of United then?

To use the author of that articles words, it wouldn't be like cleaning out your house before selling it, it would in fact be cleaning out another house you own before selling the original house.
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I doubt they could sell Man Utd plc as a separate entity with the PIKS secured on shares in RFJV which has the subsidiary as its real asset.
 
King_Eric said:
I have a question concerning the bonds and the intrest paid for them.

I seem to remember from january that people were saying the bond issue was a good idea because it allowed the Glazers to pay back their PIKs, even though the intrest paid on those bonds would be higher than the intrest paid on the big £500M loan.
If I'm not mistaking, the intrest paid on those bonds is 8+%? And the intrest on the original £500M loan between 4% and 6% or something? Correct me if I'm wrong.

I remember people saying it's not so bad to pay more intrest on this £500M as long as it means the very expensive PIKs wouldn't be there anymore.
But if those PIKs were never on United's books to begin with, was it really a good thing to exchange the original £500M loan with those bonds? And I mean good for the club, not for the Glazers.
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Changing to the Bond was better for the Glazers rather than the club really (it depends how you look at it).

Look at what happened at Liverpool for H&G. The banks had control really and when they decided they didn't want to let them have any more money, they were in the shit.

Now the Glazers are not at the mercy of the banks in terms of their ownership of United.

Also, I believe that the original bank loans had to be paid off before the PIKs could be tackled (first lien or whatever it is called) which was obviously not what the Glazers wanted at all because they had no intention of paying the capital sum any time soon.

By going for the Bond Issue, it costs United more in interest than the original bank loans but it allowed the Glazers to tackle those PIKs.
 
TheMancRedDevil said:

By going for the Bond Issue, it costs United more in interest than the original bank loans but it allowed the Glazers to tackle those PIKs.
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It doesnt - we were paying virtually the same in interest on the old senior debt as we now pay on the bonds. However this was primarily due to an FX hedge feck up as the actual interest rate on the old senior debt was lower.
 
Rood said:
It doesnt - we were paying virtually the same in interest on the old senior debt as we now pay on the bonds. However this was primarily due to an FX hedge feck up as the actual interest rate on the old senior debt was lower.
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Yes but would it not have been possible to get another bank loan for a rate at less than the Bond Issue's 8%?
 
No idea - maybe.
Even though interest rates are low, credit markets are still recovering from the financial meltdown.
 
I've always blamed the Glazer's for Beckham's departure.

And for Wilkins' departure to AC Milan.
 
Pexbo said:
Are you completely unaware that they own more than just United? They may be borrowing the money or they may have leveraged it against one of their other businesses. It doesn't matter though because it has been made clear that it will not be paid back in any way by the club.
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:lol::lol::lol: Thanks for explaining that- they just own United for fun and not the cash.
 
Commadus said:
So on Monday it will be clear where the money has come from?
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Nobody knows the answer to that one, the Glazers as they have every right to in case I get my head bitten off, keep their cards close to their chest. Nobody it would seem has got a clue atm
 
robertsoncrusoe said:
:lol::lol::lol: Thanks for explaining that- they just own United for fun and not the cash.
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Ok, now how does that relate to your recent comments.

Of course they're in it for the money, as were the people who were part of the PLC before them. As would be someone who bought the club in the future I suspect.
 
Rood said:
The original senior debt was repayable in 2013 - the interest rate ended up being pretty much the same as they now pay on the bonds.

I dont have a crystal ball so I cant tell you what happens in 2017!
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Ok, I didn't know that. Thought there was a substantial difference between the interest rate now and before january.
Thanks for the explication everyone.
 
Trigg said:
Ok, now how does that relate to your recent comments.

Of course they're in it for the money, as were the people who were part of the PLC before them. As would be someone who bought the club in the future I suspect.
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Apparently good businessmen take no money out of their businesses to fund their own lifestyles. That's why Bill Gates lives in a cardboard box.
 
robertsoncrusoe said:
:lol::lol::lol: Thanks for explaining that- they just own United for fun and not the cash.
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What are you on about? I'm saying they are paying the PIK off on their own, with no use of the clubs facilities. Wether they are doing this for P.R, because it's part of the Bond agreement or because quite frankly it makes better business sense not to break into Uniteds funds because they are vital to keeping the club running, is anyones guess.

How do we know they are doing this? Because Gill has made it clear. It's none of our business because it's nothing to do with United, where the money is coming from.
 
Crerand Legend said:
Nobody knows the answer to that one, the Glazers as they have every right to in case I get my head bitten off, keep their cards close to their chest. Nobody it would seem has got a clue atm
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That's your best post yet!
 
Rood said:
No idea - maybe.
Even though interest rates are low, credit markets are still recovering from the financial meltdown.
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With the cost of putting the Bond Issue in place, I think it's fair to say that which ever way you look at it, the Bond Issue was not really a cost-cutting idea.

It does have benefits though (no longer at the mercy of banks and the club knows exactly how much money it needs to find to service it every year) but from a fan's point of view, there's nothing about it to get excited about.

With this latest news on the PIKs (if, indeed, it IS latest news - as Gill has said for years, the PIKs are not and have never been the Club's responsibility) then I don't see why anyone should care where the money comes from to pay it off. It isn't coming from United and that's all we need to know.

It does seem like the £70m carve-out was yet another example of the Glazers providing themselves with room to manouvre - the facility is there if ever they need it and they can take it if the money is available but just because they CAN has never meant that they WILL and I suspect that accusations to the contrary say more about the accusers than the Glazers.
 
Is it possible that they've taken a extra loan secured against the club to pay off these PIK's or isn't that allowed?
 
I think they would have to take it out against Red Football, but I don't see that as a big difference, unless there is any guarantee they wouldn't take money out of the club to pay it off. It seems odd to have the facility to do that if they're not intending to use it. My money would be on this happening at a less sensitive time.
 
sincher said:
I think they would have to take it out against Red Football, but I don't see that as a big difference, unless there is any guarantee they wouldn't take money out of the club to pay it off. It seems odd to have the facility to do that if they're not intending to use it. My money would be on this happening at a less sensitive time.
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I'm sure they'll take their entitlement out at some point, I'm amazed that they haven't already. I guess it's similar to shareholders not taking their dividend entitlement.

I guess it's all speculation until (if) they share the information.
 
so if the Glazers pay off the £220m PIK loan with means not related to United, after that is done what would our long term debt end up being (estimate)?
 
neno said:
so if the Glazers pay off the £220m PIK loan with means not related to United, after that is done what would our long term debt end up being (estimate)?
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Gross debt is £509.4m. There are cash reserves of £151.7m. Therefore the net debt of Manchester United is £357.7m.
 
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