Manchester United raise £504m in bond issue

[Titch]

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.

[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

[Jack.Lfc]

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

[Titch]

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

It gives us time to find a rich arab

[Jack.Lfc]

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

[Titch]

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

[alexxxxx]

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

even a rich arab would feeb $2bn is alot of money.

[leah]

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

[Titch]

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.

[Jibbish]

I don't get it, they took out another loan of £500m to pay off some of their £700m debt?