bluetonium
Well-Known Member
They're doing it now before UEFA's new rulings come in. Let's see if Platini comes out with a torrent of abuse against the rags for basically handing the business £220m. If we did it we'd be publicly hung.
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Rag trade
- Thread starter Kinky by name
- Start date
Im with Marvin in that this can only further embed the Glazers. (what follows is full of City jargon so only read if interested in that stuff)
The most likely scenario is that they have managed to agree a heavy discount to the PIKs given that they are effectively a subordinated, distressed debt instrument (ie they sit behind £500m of more secure debt). The Glazers also own 15% of the PIKs (they bought them previously at a discount to face) so I think the total cash requirement will be much less than the £220m quoted in the press. And whilst they may not take a dividend from the club today, its pretty clear they will sometime soon if they are having to pay out say £120m-140m.
Straight refinancing is a red herring for me as it is extremely unlikely another lender would put the money in for a materially lower interest rate than the PIKs. The PIKs charge high interest because they are very high risk and subordinated to the senior debt. This type of debt across the world and various sectors would always seek a 15%+ return.
The most likely scenario is that they have managed to agree a heavy discount to the PIKs given that they are effectively a subordinated, distressed debt instrument (ie they sit behind £500m of more secure debt). The Glazers also own 15% of the PIKs (they bought them previously at a discount to face) so I think the total cash requirement will be much less than the £220m quoted in the press. And whilst they may not take a dividend from the club today, its pretty clear they will sometime soon if they are having to pay out say £120m-140m.
Straight refinancing is a red herring for me as it is extremely unlikely another lender would put the money in for a materially lower interest rate than the PIKs. The PIKs charge high interest because they are very high risk and subordinated to the senior debt. This type of debt across the world and various sectors would always seek a 15%+ return.
Lets all remember that the debt that we are talking about was not a United debt it was a personal debt of the Glazers'
We know that in reality United were the source of funds to pay it back as it was debt left over from the Glazers' purchase of the club, but the fact that they may have moved the debt onto the club is very significant.
But as has been said we dont yet have the full picture so we cannot et celebrate or of course moan.
It seems interesting though that the owner of United HAS to pump twice the money into the club compared to City's owner, but without making significant signings in the transfer market, without investing in the infrastructure and at a time when revenues and attendances are falling and yet its a good news story.
He he he.
We know that in reality United were the source of funds to pay it back as it was debt left over from the Glazers' purchase of the club, but the fact that they may have moved the debt onto the club is very significant.
But as has been said we dont yet have the full picture so we cannot et celebrate or of course moan.
It seems interesting though that the owner of United HAS to pump twice the money into the club compared to City's owner, but without making significant signings in the transfer market, without investing in the infrastructure and at a time when revenues and attendances are falling and yet its a good news story.
He he he.
So after reading on here for the past 12 months about the inevitable decline of the rags as they are financially bereft... the Glazers actually knew what they were doing all along!
It's funny how billionaires tend to know more about finance than most of us here on Bluemoon!
Ain't life a woman...
It's funny how billionaires tend to know more about finance than most of us here on Bluemoon!
Ain't life a woman...
Prestwich_Blue
Well-Known Member
Agree that re-financing seems unlikely so at some point. The other option is that they've sold something. As the PIK notes could have destroyed them financially, paying them off had to be their top priority so it could be that they've had to sacrifice something else, possibly the Tampa Bay Buccaneers or some of their malls (although these are in a mess).projectriver said:Im with Marvin in that this can only further embed the Glazers. (what follows is full of City jargon so only read if interested in that stuff)
The most likely scenario is that they have managed to agree a heavy discount to the PIKs given that they are effectively a subordinated, distressed debt instrument (ie they sit behind £500m of more secure debt). The Glazers also own 15% of the PIKs (they bought them previously at a discount to face) so I think the total cash requirement will be much less than the £220m quoted in the press. And whilst they may not take a dividend from the club today, its pretty clear they will sometime soon if they are having to pay out say £120m-140m.
Straight refinancing is a red herring for me as it is extremely unlikely another lender would put the money in for a materially lower interest rate than the PIKs. The PIKs charge high interest because they are very high risk and subordinated to the senior debt. This type of debt across the world and various sectors would always seek a 15%+ return.
They will have ot use the cash from the club at some point. There's no way they would build up the cash pile they have and not do so. If that wasn't the plan then they would have spent it on players.
They could have sold a stake in the club itself or maybe even sold the Swamp. That would be piss funny. We should know a bit more by the end of the week.
Conference call with investors this morning. It's reported that they are likely to face questions about this.Prestwich_Blue said:Agree that re-financing seems unlikely so at some point. The other option is that they've sold something. As the PIK notes could have destroyed them financially, paying them off had to be their top priority so it could be that they've had to sacrifice something else, possibly the Tampa Bay Buccaneers or some of their malls (although these are in a mess).projectriver said:Im with Marvin in that this can only further embed the Glazers. (what follows is full of City jargon so only read if interested in that stuff)
The most likely scenario is that they have managed to agree a heavy discount to the PIKs given that they are effectively a subordinated, distressed debt instrument (ie they sit behind £500m of more secure debt). The Glazers also own 15% of the PIKs (they bought them previously at a discount to face) so I think the total cash requirement will be much less than the £220m quoted in the press. And whilst they may not take a dividend from the club today, its pretty clear they will sometime soon if they are having to pay out say £120m-140m.
Straight refinancing is a red herring for me as it is extremely unlikely another lender would put the money in for a materially lower interest rate than the PIKs. The PIKs charge high interest because they are very high risk and subordinated to the senior debt. This type of debt across the world and various sectors would always seek a 15%+ return.
They will have ot use the cash from the club at some point. There's no way they would build up the cash pile they have and not do so. If that wasn't the plan then they would have spent it on players.
They could have sold a stake in the club itself or maybe even sold the Swamp. That would be piss funny. We should know a bit more by the end of the week.
Prestwich_Blue said:Agree that re-financing seems unlikely so at some point. The other option is that they've sold something. As the PIK notes could have destroyed them financially, paying them off had to be their top priority so it could be that they've had to sacrifice something else, possibly the Tampa Bay Buccaneers or some of their malls (although these are in a mess).
They will have ot use the cash from the club at some point. There's no way they would build up the cash pile they have and not do so. If that wasn't the plan then they would have spent it on players.
They could have sold a stake in the club itself or maybe even sold the Swamp. That would be piss funny. We should know a bit more by the end of the week.
Don't believe the bond would allow them to sell the ground. And a stake is virtually worthless sitting as it does behind £500m of bond and, effectively, £243m of PIKs plus interest. That conclusion is dependent on my valuation of the club being well shy of the £1bn often suggested.
bluemonkey71
Well-Known Member
- Joined
- 26 Jan 2009
- Messages
- 7,118
Prestwich_Blue said:Agree that re-financing seems unlikely so at some point. The other option is that they've sold something. As the PIK notes could have destroyed them financially, paying them off had to be their top priority so it could be that they've had to sacrifice something else, possibly the Tampa Bay Buccaneers or some of their malls (although these are in a mess).projectriver said:Im with Marvin in that this can only further embed the Glazers. (what follows is full of City jargon so only read if interested in that stuff)
The most likely scenario is that they have managed to agree a heavy discount to the PIKs given that they are effectively a subordinated, distressed debt instrument (ie they sit behind £500m of more secure debt). The Glazers also own 15% of the PIKs (they bought them previously at a discount to face) so I think the total cash requirement will be much less than the £220m quoted in the press. And whilst they may not take a dividend from the club today, its pretty clear they will sometime soon if they are having to pay out say £120m-140m.
Straight refinancing is a red herring for me as it is extremely unlikely another lender would put the money in for a materially lower interest rate than the PIKs. The PIKs charge high interest because they are very high risk and subordinated to the senior debt. This type of debt across the world and various sectors would always seek a 15%+ return.
They will have ot use the cash from the club at some point. There's no way they would build up the cash pile they have and not do so. If that wasn't the plan then they would have spent it on players.
They could have sold a stake in the club itself or maybe even sold the Swamp. That would be piss funny. We should know a bit more by the end of the week.
Maybe the have sold the naming rights to the stadium and used the money from that?
Marvin said:Conference call with investors this morning. It's reported that they are likely to face questions about this.
I predict: "The club will not be taking any questions in respect of the owner's financial arrangements as that is a matter purely for them" Or words to that effect.
I seem to remember that they had to limit new debt in terms of 'borrowing' under the last bond issue.
So unless it is new, personal cash/refinancing from the Glazers side then it simply has to be a sale/leaseback of some sort.
Perhaps they have liquidated a few bits and pieces in the US to get the monkey off their back for now.
Remember it was personal debt of the Glazers.
Then 6 months later, after they spend £30m on players they exercise their right to take £70m out of the club?
So unless it is new, personal cash/refinancing from the Glazers side then it simply has to be a sale/leaseback of some sort.
Perhaps they have liquidated a few bits and pieces in the US to get the monkey off their back for now.
Remember it was personal debt of the Glazers.
Then 6 months later, after they spend £30m on players they exercise their right to take £70m out of the club?