skip to content

Investors snap up controversial 500m United bonds secured on Old Trafford

22 Jan 2010 18:17:31

Investors snap up controversial 500m United bonds secured on Old Trafford

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. Attractive investment: Dimitar Berbatov helps to keep Manchester United competitive on the pitch In the end, £250m sold in sterling has been pinned to a rate of 8.75 per cent, with the remainder in dollars going for 8.375 per cent. It means the overall outlay will amount to just under £45m 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 £91.3m. That figure is not touched by either the world record £80m sale of Cristiano Ronaldo to Real Madrid, or the current interest bill of £41.9m lodged against the club, that is actually due to rise because of the bond. Triple Glazed: Underfire Manchester United directors Joel, Avram and Bryan Glazer 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 £70m 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 per cent next year. However, the idea is clearly for the Glazers to reduce their overall interest bill, rather than just United's. Threat: Old Trafford IS potentially up for sale, much to the concern of Manchester United's supporters 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 tomorrow's game against Hull at Old Trafford.  United boss Sir Alex doesn't care for Neville's row with tormentor Tevez Police plead with City and United fans to behave in next Manchester derbyWelcome back: Ferdinand set for Man United comeback against Hull CitySold Trafford: Glazers ready to sell United home to ease crippling debtMANCHESTER UNITED FC


Daily_Mail

Sponsored links

advertisement

Related Manchester United News

advertisement

advertisment