London: Manchester United plans to raise £500 million (Rs3,645 crore) in a bond sale as the US owners of the 18-time English soccer champion try to refinance debt.
The club will seek to sell senior secured notes due 2017 in both dollars and pounds, it said in the offer document, seen by Bloomberg News. United spokesman Philip Townsend declined to provide further details, including the value of the coupon.
The team, owned by the US-based Glazer family, has debt of £699 million. The Glazers completed a £790 million buyout in 2005, and the squad has won three league titles and the 2008 European Cup since then. This season, United has dropped out of the FA Cup, and lost its most marketable player, Cristiano Ronaldo, who moved to Real Madrid.
“This looks like a fairly risky type of investment considering the amount of leverage the American owners have,” Jean-Luc Petit, a senior fixed-income fund manager at BT Investment Management Ltd said in a phone interview from Sydney. “I don’t think mainstream bond fund managers would be that interested in investing in Manchester United.”
The club has hired Bank of America-Merrill Lynch, Deutsche Bank AG, Goldman Sachs, JPMorgan Chase and Co. and KKR and Co. to sell the seven-year bonds.
United is planning to take out a £75 million revolving credit line with a syndicate of banks led by JPMorgan to help it purchase new players, the offer document said.
The bond sale’s proceeds will be used to refinance existing debt secured against the club, will be issued by MU Finance Plc, the statement, released just before the start of trading in Asia, said.
While the Glazers, who also own the National Football League’s Tampa Bay Buccaneers, have had success on the field, United has had losses financially. United’s parent company Red Football Joint Venture Ltd said in an annual filing in April that its loss narrowed to £43.2 million from £57.8 million for the year ended June 2008. The company paid £68.8 million in net interest, according to the accounts.