Manchester United has launched a £500 million ($801.4 million), seven-year high-yield bond that will be used to refinance existing debt, banks working on the deal said Monday.
J. P. Morgan Chase Co., Bank of America Merrill Lynch, Deutsche Bank AG, Goldman Sachs Group Inc., Royal Bank of Scotland Group PLC and KKR Financial are joint-lead managers on the deal.
The senior, secured bond will be issued by the club's subsidiary, MU Finance PLC. The deal is expected to be priced towards the end of next week. Roadshows will be held in Asia Monday and Tuesday, in Europe from Jan. 13 until Jan. 18, and in the U.S. for a week from Jan. 19.
Manchester United has a £700 million debt load, which was incurred in 2005 when U.S. entrepreneur Malcolm Glazer and his family bought the club in a £790 million leveraged buyout. Financial results released by the club Monday showed Manchester United still owes £509.5 million in secured bank loans.
People familiar with the matter have previously told Dow Jones Newswires that the bond issue will pay off senior bank debt first and, depending on the size of the issue, also repay some of the club's £135 million payment-in-kind debt, which carries an interest rate of 14.25%. Payment-in-kind debt is where interest is paid via the issuance of new debt, rather than in cash.
Source: Wall Street Journal.
Manchester United has said it plans to raise £500m through a bond issue in order to refinance its debts.
The announcement came as the club announced pre-tax profits of £48.2m for the year to 30 June 2009, compared with a loss of £21.4m a year ago.
The profit includes the £80m fee the club received from Real Madrid for Cristiano Ronaldo last summer.
US businessman Malcolm Glazer bought the club for £790m in 2005, borrowing heavily to do so.
Group turnover rose to £278.5m from £256.2m the previous year, the club's holding company Red Football Ltd said.
There has been much speculation in recent weeks that United was considering a bond issue to address its debts.
Although no total debt figure was disclosed in the results announcement, it has previously been reported as £699m.
The Old Trafford club paid £41.9m in interest on a £509.5m loan.
Without the sale of Ronaldo, United would have reported a loss of £31.8m, despite winning the English Premier League for the third year in a row, as well as the Carling Cup and the Club World Cup last season.
The team also finished runners up in the Uefa Champions League.
Last week, United's big-spending neighbours Manchester City reported an annual loss of £92.6m after splashing out on top-class players since new owner Sheikh Mansour bought the club in September 2008.
Current Premier League leaders Chelsea made a loss of £44.4m last year but said it was now "virtually debt-free".
Source: bbc.co.uk
J. P. Morgan Chase Co., Bank of America Merrill Lynch, Deutsche Bank AG, Goldman Sachs Group Inc., Royal Bank of Scotland Group PLC and KKR Financial are joint-lead managers on the deal.
The senior, secured bond will be issued by the club's subsidiary, MU Finance PLC. The deal is expected to be priced towards the end of next week. Roadshows will be held in Asia Monday and Tuesday, in Europe from Jan. 13 until Jan. 18, and in the U.S. for a week from Jan. 19.
Manchester United has a £700 million debt load, which was incurred in 2005 when U.S. entrepreneur Malcolm Glazer and his family bought the club in a £790 million leveraged buyout. Financial results released by the club Monday showed Manchester United still owes £509.5 million in secured bank loans.
People familiar with the matter have previously told Dow Jones Newswires that the bond issue will pay off senior bank debt first and, depending on the size of the issue, also repay some of the club's £135 million payment-in-kind debt, which carries an interest rate of 14.25%. Payment-in-kind debt is where interest is paid via the issuance of new debt, rather than in cash.
Source: Wall Street Journal.
Manchester United has said it plans to raise £500m through a bond issue in order to refinance its debts.
The announcement came as the club announced pre-tax profits of £48.2m for the year to 30 June 2009, compared with a loss of £21.4m a year ago.
The profit includes the £80m fee the club received from Real Madrid for Cristiano Ronaldo last summer.
US businessman Malcolm Glazer bought the club for £790m in 2005, borrowing heavily to do so.
Group turnover rose to £278.5m from £256.2m the previous year, the club's holding company Red Football Ltd said.
There has been much speculation in recent weeks that United was considering a bond issue to address its debts.
Although no total debt figure was disclosed in the results announcement, it has previously been reported as £699m.
The Old Trafford club paid £41.9m in interest on a £509.5m loan.
Without the sale of Ronaldo, United would have reported a loss of £31.8m, despite winning the English Premier League for the third year in a row, as well as the Carling Cup and the Club World Cup last season.
The team also finished runners up in the Uefa Champions League.
Last week, United's big-spending neighbours Manchester City reported an annual loss of £92.6m after splashing out on top-class players since new owner Sheikh Mansour bought the club in September 2008.
Current Premier League leaders Chelsea made a loss of £44.4m last year but said it was now "virtually debt-free".
Source: bbc.co.uk