I would imagine the main object of the exercise is to wipe out the PIKs. If you take the money sloshing around in the current account plus the £70M earmarked from the bond that would about kill them off.
ALL issues relating to the bond issue and club finances
- Thread starter sammsky1
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We've got to accept that our time is coming to an end.
The final straw will be when the c*nts cash in on Rooney in the summer.
The final straw will be when the c*nts cash in on Rooney in the summer.
This is my first time saying this.
It's time for the owners to sell the club. There is no trust any longer and this was the final straw. I don't hate them or something like that but I love my club. Adios hombres!
It's time for the owners to sell the club. There is no trust any longer and this was the final straw. I don't hate them or something like that but I love my club. Adios hombres!
Directors loans are prohibited under the companies act. If the money has been loaned to a company which they are a director of then this will come under a 'related party transaction', and the details will be fully disclosed in the accounts when they become available.
Without meaning to sound like a Glazer stooge, management charges are common place in business. If these fee's were excessive then they would find it hard to get them past the auditors. I'm surprised the banks and hedgefunds haven't covenanted against these charges to be honest.
Without meaning to sound like a Glazer stooge, management charges are common place in business. If these fee's were excessive then they would find it hard to get them past the auditors. I'm surprised the banks and hedgefunds haven't covenanted against these charges to be honest.
Not yet it doesn't.
I'm getting sick of this shit.... Keep it in one bloody thread FFS.
Problem is, no matter what someone might think - there's not a whole lot he can do anyway.
It's certainly good news for the Glazers if they pull it off. But bad news for United in the short to medium term.
Do you seriously believe that?
They wont be safe.
True. & the PIKs are the biggest problem.
My Summary of events based on this thread: (for anyone who still doesnt have a clue what is going on).
We have debt. A lot of debt. This was brought on us - as we all know - by the Glazers, who stupidly decided to take out PIK (Payment In Kind) loans to finance their takeover. PIK's are essentially just loans, but with far higher rates of interest specifically, our ones are at 8% and 14.25%, which is the main cause of our problems as we cannot afford to keep up with the interest payments. Because of that, the interest is getting "rolled up" into the debt, and it builds up like a rolling snowball or downward spiral, whichever you prefer.
When the PIKs are due to be repaid, if the Glazers cannot stump up the cash, the value of the loans will be given to the investors in shares for whatever the Glazers cannot/have not paid.
Now, bonds are essentially just another type of investment or loan, a lot depends on the exact terms and structure of the bonds, but from what we have heard, chances are that we are going to issue bonds for £600m - giving us the money to pay off the PIKs. The bonds would be repayable in about 2017 (again, depends on the terms and conditions) with a rate of interest of about 5% - far lower than the PIKs - which is normally paid on an annual basis. So in 2017 we will need to pay off £600m, but until then we will have far lower interest payments, which all in all is probably a good thing.
The real question remains however, how they plan to pay off the money on a bond in 2017 other than by selling the club. Because whilst the PIKs will simply be converted to equity (shares) if they cannot be paid - the bonds will likely have no such clause in them, and will need to be paid back in cold hard cash, something that is in short supply at the moment for us.
I think that roughly sums it up (based on my fairly poor financial knowledge).
We have debt. A lot of debt. This was brought on us - as we all know - by the Glazers, who stupidly decided to take out PIK (Payment In Kind) loans to finance their takeover. PIK's are essentially just loans, but with far higher rates of interest specifically, our ones are at 8% and 14.25%, which is the main cause of our problems as we cannot afford to keep up with the interest payments. Because of that, the interest is getting "rolled up" into the debt, and it builds up like a rolling snowball or downward spiral, whichever you prefer.
When the PIKs are due to be repaid, if the Glazers cannot stump up the cash, the value of the loans will be given to the investors in shares for whatever the Glazers cannot/have not paid.
Now, bonds are essentially just another type of investment or loan, a lot depends on the exact terms and structure of the bonds, but from what we have heard, chances are that we are going to issue bonds for £600m - giving us the money to pay off the PIKs. The bonds would be repayable in about 2017 (again, depends on the terms and conditions) with a rate of interest of about 5% - far lower than the PIKs - which is normally paid on an annual basis. So in 2017 we will need to pay off £600m, but until then we will have far lower interest payments, which all in all is probably a good thing.
The real question remains however, how they plan to pay off the money on a bond in 2017 other than by selling the club. Because whilst the PIKs will simply be converted to equity (shares) if they cannot be paid - the bonds will likely have no such clause in them, and will need to be paid back in cold hard cash, something that is in short supply at the moment for us.
I think that roughly sums it up (based on my fairly poor financial knowledge).
Just one question. Can't bonds be paid back way before they are due?
They can be traded between date of issue and date of maturity. On maturity, bond issuers (in this case, the Glazers) would pay the bond holders the principal (and possibly interest accrued, I dont wholly remember).
If I'm getting this correctly, does that mean we must wait till the bond matures to pay back?
Forgive me. if I sound silly. Me and financial figures are not good friends...
There only seems to be provision to use £70m to pay off the PIKs at the moment - not sure about the rest.
This all starts to make sense when we remember that the first tranche of the PIKs were repayable in August 2010.
The club have the option to buy back the bonds after 3 years.
There is a decent summary of some of the facts (without headline grabbing bullshit) here:
FT Alphaville Modern football finance: Man Utd edition (updated)
If I'm getting this correctly, does that mean we must wait till the bond matures to pay back?
Forgive me. if I sound silly. Me and financial figures are not good friends...
Hah...you and me both Cheify. Did this in Financial Markets last year and I still dont get it.
But yeah, I think thats the case (correct me if im wrong here people)
Interesting....
I feel that. I still wonder how I passed finance and accounting
That's a scary thought
Good question indeed from FT alphaville comments - why glazers took out a personal loan from hedge funds in the first place? And at such a crippling interest rate? One would think they could've secured more favorable loan at the time of the takeover.
I feel that. I still wonder how I passed finance and accounting
That's a scary thought
Then at least your consciences are clear, as it's people like you who graduated, smoked some cigars, patted themselves on the back, and then helped get us into this mess.
My understanding of the bond market may not be whole at the mo'
But fecking hell, at least I wouldn't have gone and bought the club with money that wasn't mine in the first place.
Common sense. I sense it is lacking in the Glazers.
Wait and see.
Yes it is a good question - MUST will tell you it is because no one else would lend them the money so they were forced to take the very high interest option.
However that has never really made sense to me because at the time it was quite easy to borrow money (unlike now).
I have already said here in the past that the PIKs could have been a devious way for the Glazers to extract money from the club.
From your sums there's about £146M in cash which added to the £70M makes about the outstanding PIKS plus a bit of early redemption penalty. The revolving credit is then available to run the company and you have replaced the senior debt with a slightly more expensive bond (worth it to get the PIK monkey off your back).
The £70m has to come out of the £146m so you cant add them together.
You had £146M in the bank on 30 September -nothing to do with the bond.
I meant the Credit Crunch Igors who happily (and mindlessly) shuffled about in the dungeons stirring the derivative stew whilst dreaming of one day living in the castle above.
That was my understanding too. I think it says it in the prospectus.
So if the bonds are sold, then United will have £146m in the bank (rather than the £116m or whatever it is at present). So this, £30m goes to pay off some of the senior debt, and £70m goes (probably) to pay off the PIKs. So United will have less money to spend in the short term on things like players/wages etc., not more (unless an additional loan is taken out). Does that sound right?
MUST buy bonds
Ahh...sorry lad.
Thought that was a pop at me.
Well I guess one could see it as kind of a challenge. After all, you guys now have an interesting task presented to you by your bungling predecessors.
Study hard and think broadly across disciplines to come up with creative (non-criminal, market-faith restoring) ways of moving capital without too much clotting. We'll be indebted to you.
An appropriate metaphor.
2017 sound like a very important year in our history.
Thank you for not calling a horrible pun by its Christian name.
Mate I've been thinking the same.
I've honestly thought of running for local office at some point to try and rejuvenate my city and my state because it (Adelaide) is way behind the times here in Aus. Doesn't help that the two major parties are complete and utter cocks.
Onto the issue at hand. I'm struggling to see why the Glazers thought it'd be prudent to do what they have done. They must have seen MUFC and been tranfixed bvy its shinyness and said, to quote Little Britain, "I want that one!"
I'd would have wanted them to take over some other club, but in reality, who could wish these types of money hungry urchins upon any club?
I reckon they will be long gone by then mate.
The world ends in 2012 anyway so no worries.
Maybe that is the way the Glazer's planned it all along. To keep the club going till 2012 because the world shall end. In that case the joke is on the banks who are taking on these bonds.
Maybe we need to go bust in order to burn the leeches off.
OT will still be there. Someone would buy it and we could start again from scratch. That would be interesting. Manchester United will never die.
OT will still be there. Someone would buy it and we could start again from scratch. That would be interesting. Manchester United will never die.
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