Manchester United raise £504m in bond issue

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22-01-2010, 05:17 PM
Titch

Manchester United raise £504m in bond issue

Manchester United have successfully raised £504m through a bond issue, which will cover most of what the club owe to international banks.

The deal means the Premier League club will be able to pay off nearly all their outstanding debts of £509m.

They will face an annual interest bill of £45m a year on the bonds.
The sale comes after figures showed debts at the club's parent firm, Red Football Joint Venture, rose to £716.5m ($1.17bn) in the year to June 2009.

Pounds and dollars

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%.

However, unlike the debt at present secured against the club, the

seven-year bonds will not mature until 1 February 2017.

The annual interest bill on the bonds is close to the £41.2m in interest paid in the last financial year.

But 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.

On Thursday, it was confirmed that the club had signed a three-year sponsorship deal with Turkish Airlines to take over as the club's official carrier.
22-01-2010, 05:19 PM
Immenseman

it's all so confusing lol. basically the debt will get bigger but because it's in bonds they don't have to pay til 2017 and won't be restricted by the banks? so they've used this money to pay the banks? idk lol
22-01-2010, 05:20 PM
Jack.Lfc

Basically it just gives them time? which will lead to a higher amount of debt?
22-01-2010, 05:23 PM
Titch

Quote:

Originally Posted by Jack.Lfc

Basically it just gives them time? which will lead to a higher amount of debt?

It gives us time to find a rich arab
22-01-2010, 05:40 PM
Jack.Lfc

Why would someone buy with that amount of debt, it would cost over 2bn
22-01-2010, 05:53 PM
Titch

Quote:

Originally Posted by Jack.Lfc

Why would someone buy with that amount of debt, it would cost over 2bn

Sum idiot arab with more money than sense hopefully will LOL
22-01-2010, 05:54 PM
alexxxxx

all this does is buy them time but make the situation worse.

even a rich arab would feeb $2bn is alot of money.
22-01-2010, 06:13 PM
leah

don't get how their debt has gone from 700 mil to 500 mil?
22-01-2010, 06:29 PM
Titch

Quote:

Originally Posted by Leaahh.

don't get how their debt has gone from 700 mil to 500 mil?

Nither do i, think we have 2 debts (a 500m one held against club + holding company) and a 200m one held a against family + club.

Not to sure then, btw this was from bbc website.
22-01-2010, 06:29 PM
Jibbish

I don't get it, they took out another loan of £500m to pay off some of their £700m debt?
22-01-2010, 06:31 PM
Immenseman

no, they put it into bonds for security. they don't have to do anything til 2k17 now and they don't have to sell anything off
22-01-2010, 06:57 PM
United-Clowgon

I came on to post this! but it already has been. :P

It's a bit of good news and what Jake said, we don't have to do anything dramatic to pay off the debts until 2017. Which I'm sure by then, it will all be payed off.

I believe however, we have to pay 45 million a year in intrest payments (bonds) which I'm really pissed off about - That money could be used in building our next team/players wages/staff/coaches ect/

Hopefully in the next couple of months/year w/e, some Rich Arab will come along and buy the Club. Qatar wants to host the World Cup so perhaps someone Rich from there will buy the Club and promote football over there.

Peace out dudettes.
22-01-2010, 08:08 PM
leah

Still in 200m debt then?
22-01-2010, 08:12 PM
luce

my dad was interested in some but in the end he couldn't be bothered however it would have given us quite a bit of profit if he'd bought the right amount :)!
22-01-2010, 08:23 PM
Immenseman

leah it's still 700+. the debt is just in another format.
22-01-2010, 08:44 PM
leah

sounds complicated and rubbish
22-01-2010, 08:49 PM
Immenseman

yah, just means they can ignore it for longer

i think it's like this

u owe ur mate #1 £20 he needs it for the end of the week
ur other mate #2 will lend u the £20 and he'll let u keep it til end of yr. but he adds interest every month so u end up paying back £60.

mate #2 wont beat u up for it
mate #1 will

im gr8 at makin this simple
22-01-2010, 09:01 PM
CHA!NGANG

£45 Million intrest isn't bad at all considering the size of loan and the fact that it's over 7 years. All this has done is freed up time and stopped United from being forced to pay back a chunk of the debt in a quick period of time. The debt is now £45 Million bigger than before but they have 7 more years to find a solution which they will do eventually.
22-01-2010, 10:02 PM
Black_Apalachi

Of course some rich Arab will come and buy it, after all Man U will always be the biggest club in the world and can only get bigger (or whatever Clowgon said the other day lol) :P.
23-01-2010, 12:27 AM
leah

However if they don't find a solution the debt will be much worse :) (yn)!!
23-01-2010, 01:40 AM
StefanWolves

I like how people think there is an unlimited amount of Arab Billionaires, well guess what? there isn't!
23-01-2010, 01:45 AM
Immenseman

for the biggest football club in the world, there pretty much is.
23-01-2010, 02:17 AM
Jack.Lfc

Thing is, why would someone wait to buy united, theres only going to be more debt to pay off.
23-01-2010, 02:23 AM
Immenseman

status.

why do people want the most well known cars? they're not the best. they resemble power. class. wealth. owning the biggest club from the biggest world sport makes you very important. incentive enough for some people.

it wouldn't be a good business deal, no.
23-01-2010, 02:31 AM
Titch

Quote:

Originally Posted by Immenseman

status.

why do people want the most well known cars? they're not the best. they resemble power. class. wealth. owning the biggest club from the biggest world sport makes you very important. incentive enough for some people.

it wouldn't be a good business deal, no.

true, the current quickest car in world is only £118,000 where as most supercars average £220,00 in price.

It will be so they can say, i own the biggest football club in world, NANANNANANANANANANANNANA in your face.
23-01-2010, 09:04 AM
TickTockTickTock

Loans to pay off loan interest, class.

Tick Tock Tick Tock Tick Tock Tick Tock Tick Tock!!
23-01-2010, 02:28 PM
leah

Quote:

Originally Posted by Immenseman

for the biggest football club in the world, there pretty much is.

:eusa_wall

Hate to burst your deluded bubbles fellas but....

Manchester United are currently in 716 million pounds worth of debt, they may have these bonds but that will only add an annual sum of 45 million onto that debt, you will have to find a way of paying this back, and all it has done is given you more time.

The outgoings of the club severely outweighs the income and that won't change, you could make some money from selling players, however, if you do that you won't qualify for the champions league which will again, restrict your income. To make more money you need to either sacrifice the champions league payout by selling players or you'll need to sacrifice the money you'd make on some of your better players in hopes of qualifying for the CL. Which ever one you pick you'll gain money but you'll also lose it.

The bonds have bought you time, but they're also increasing the debt each year and not by a small amount either. Your only hope of actually getting out of the trouble you're in is if you get bought by some tycoon who will pay off all the debts. Tycoon's are huge business men, and they have superior knowledge of finances and business, so I highly doubt they'd want to buy so much debt without a guarantee of making it back.

ah well, at least they can rely on clowgon's annual purchase of a season ticket.
23-01-2010, 02:31 PM
Jack.Lfc

Quote:

Originally Posted by TickTockTickTock

Loans to pay off loan interest, class.

Tick Tock Tick Tock Tick Tock Tick Tock Tick Tock!!

Ahah i get your name now.
23-01-2010, 04:01 PM
Immenseman

They're huge business men? lmao, abramovich has made loads at cheksi!!! just like the man city owners are making huge profits too!! :rolleyes:
23-01-2010, 04:04 PM
leah

Quote:

Originally Posted by Immenseman

They're huge business men? lmao, abramovich has made loads at cheksi!!! just like the man city owners are making huge profits too!! :rolleyes:

They will make a profit though, the only reason they've spent so much is on the players. They didn't have to shell out 700+ million on debt honey ;)
23-01-2010, 04:05 PM
Immenseman

They 100% won't. They've already said they know they'll never make it back, they do it for power and status, nothing more.
23-01-2010, 04:27 PM
CHA!NGANG

Yes Jake but they haven't had to pay £700 Million first before they got there power have they? They bought the club in good health and then they spent money building it up. With United, they will have to pay £700 Million first, then they'd have to buy players.

People seem to think that Arab Billionaires think £700 Million is nothing... Even for Bill Gates that's about 2% of his worth which for Billionaire to just give away to something which isn't his fault or responsibility is stupid. All United fans seem to think because of It's reputation, Billionaires will just spend on United but they're not Billionaires for nothing and I doubt any of them are prepared to just give away £700 Million...
23-01-2010, 04:33 PM
Immenseman

If they were debt free though they'd make so much, it's not all that bad. They paid tens of millions last year of debt payments and interest from the debt. If this was gone, they'd be making tens of millions. I agree, they're in a dire state but people on here are deluded if they think United will come under threat.
23-01-2010, 04:34 PM
leah

Quote:

Originally Posted by Immenseman

They 100% won't. They've already said they know they'll never make it back, they do it for power and status, nothing more.

Quote:

Originally Posted by CHA!NGANG

Yes Jake but they haven't had to pay £700 Million first before they got there power have they? They bought the club in good health and then they spent money building it up. With United, they will have to pay £700 Million first, then they'd have to buy players.

People seem to think that Arab Billionaires think £700 Million is nothing... Even for Bill Gates that's about 2% of his worth which for Billionaire to just give away to something which isn't his fault or responsibility is stupid. All United fans seem to think because of It's reputation, Billionaires will just spend on United but they're not Billionaires for nothing and I doubt any of them are prepared to just give away £700 Million...

This.

They may have got power and status from it but they are still going to get a steady income from the clubs, say chelsea win the premiership, they'll get a huge pay out, so spending that money was worth while.

City never get into Europe, so if they do this season they'll also get a payout, something which can be put towards making the money back.

United may win the premiership, they may get into Europe but because their debt is so great no billionaire in their right mind would want to touch them, because quite frankly, it isn't worth it.

at jakes above post... even if they weren't in debt they wouldn't make a profit because united are making a loss each year... which is why the debt has built up, amongst other things.
23-01-2010, 04:43 PM
CHA!NGANG

No I agree that United won't be in trouble really. They will eventually get around it and I doubt they'd have to sell any players but I don't think that Arab Billionaires will be dying to buy United either. Saying that, it won't surprise me if there is 1 that's intrested but there won't be many.
23-01-2010, 04:46 PM
leah

Quote:

Originally Posted by CHA!NGANG

No I agree that United won't be in trouble really. They will eventually get around it and I doubt they'd have to sell any players but I don't think that Arab Billionaires will be dying to buy United either. Saying that, it won't surprise me if there is 1 that's intrested but there won't be many.

How will they though? That's what i'm saying. They've bought themselves some time but the only way to clear those debts is to make that money from somewhere.

The only way to get rid of the debts is to be taken over by some rich idiot who will pay them all off, and no one with such high amounts of money is stupid.
23-01-2010, 04:53 PM
CHA!NGANG

I'm sure they'll think of something. Getting a buyer would solve all the problems yes but that's only if there's someone willing to do it and that might happen who knows but what I'm saying is that there won't be a lot of people willing to buy it, probably only 1 or 2 that have more money than sense. Saying that, I guess they could sell the stadium which would pay off the majority of the debt. There are probably other ways too which I don't know but the pro's do but I doubt they'll be forced to sell players for money. On the other hand, I also don't think they will be able to buy a lot of players either, and with Arsenal and Chelsea increasingly growing along with City, United are destined to find it harder every year to win the title and although I can see them qualifiying for the CL for years to come, I don't see them winning the title or CL for a while until the finances are solved. I recon in 2-3 years it will be: Arsenal, Chelsea, City and United in the top 4 in that order with Liverpool fading away too unless they get a buyer too.
23-01-2010, 05:00 PM
leah

Quote:

Originally Posted by CHA!NGANG

I'm sure they'll think of something. Getting a buyer would solve all the problems yes but that's only if there's someone willing to do it and that might happen who knows but what I'm saying is that there won't be a lot of people willing to buy it, probably only 1 or 2 that have more money than sense. Saying that, I guess they could sell the stadium which would pay off the majority of the debt. There are probably other ways too which I don't know but the pro's do but I doubt they'll be forced to sell players for money. On the other hand, I also don't think they will be able to buy a lot of players either, and with Arsenal and Chelsea increasingly growing along with City, United are destined to find it harder every year to win the title and although I can see them qualifiying for the CL for years to come, I don't see them winning the title or CL for a while until the finances are solved. I recon in 2-3 years it will be: Arsenal, Chelsea, City and United in the top 4 in that order with Liverpool fading away too unless they get a buyer too.

Yeah I agree with you on the latter part of your post but I still doubt they'll find a way out of the debt they're in. Saying that they're jammy so probably will, but there isn't a logical way in which they could atm. They won't sell players because fergie is too stubborn, they wouldn't sell their stadium because if they did the fans would go mental plus it would be a damage to the ego of the club if they did that.

Also, the Glazers don't look keen to sell, if they do they will sell the debt with it so the current crisis isn't harming them or their money at all.