Rags Saved? r.e Bond issue

[lancs blue]

Ok, so you have maxed out your credit card to the extent you cannot now afford to meet even the minimum monthly payments. So you take out another credit card at a lower rate of interest, but, due to your poor credit rating the limit on the new card aint enough to cover the origonal debt.
But, the lower limit on the new crd means that you can now cover the minimum monthly payments on both cards although you still cannot start reducing the debt.
This gives you a few months, maybe even a couple of years to hope for a monster inflation busting pay rise, or your dear old great aunt jane (who you have never seen) dies and leaves you all her dosh.

Have you been hacking into my personal finances??

 

[AlfGreyruinedmyday]

It should also be noted that the £716.5mln quoted is as at 30 June 2009, i.e. nearly 7 months ago. If their bank debt was £509mln then their PIK loan totalled £207.5mln. At an interest rate of 14.25% then their debt has increased by a further £17.5mln, being £734mln and rising. The fact that a large part will be raised in US dollars also gives rise to an exchange rate risk as their revenue stream may not generate the dollars necessary to meet the interest and principal payments. They may achieve this if Aon pay in dollars, but they've already received half of the total amount due in the first year of a 4 year deal (indicative of cashflow concerns).
They will probably be able to find someone or a consortium able to pay an amount capable of taking the Glazers out, but the longer that takes then the less attractive they become. Limited investment will lead to squad unrest, supporter unrest and a less attractive investment. Add to this the need to find a replacement for SAF. Whatever they believe, this is not a good time to be a rag. Long may it continue.

 

[Packrat]

Whatever they believe, this is not a good time to be a rag. Long may it continue.

I shall sleep well tonight.

A debt is a debt no matter how many fancy words or phrases you change it to.

 

[Uber Blues]

As I understand it - its like this currently approx:

550mill+ to banks at 5.05%
205 mill PIK at 14.25%

The purpose of paying off the bank loans is that they cant repay the PIK loans until the bank loans gone - bit like credit cards charging the higher rates of interest on the outstanding debts first.

So now theyve got:

50-100mill still to banks at 5.05%
205mill PIK at 14.25%
500mill at 8%

Im no financial whizz kid but it doesnt affect things that much as far as debt servicing but if they can eliminate the rest of the bank loan they can begin to pay off the PIK loans - they still need to make huge operating profits to make dents in any of it!

That's more or less as I understand It. Although Loan 1 the plus 500 millions Is at a higher rate around 8.5% which currently costs around 41 millions In annual Interest, This loan will In fact cost more to serice through the bonds scheme at a return to Investors off around 9%, so totaling around 45 millions In bond related annual payments (every quarter I think). What the bond Issue has allowed Is for the Glazers to try and do something about the higher PIK loans at 14.25 per annum. Something they were not allowed to do under the terms of the agreement before clearing of the debt secured against United for the plus 500 millions..Clear??. In addition the Glazers as owners are permitted to take out annualy some 70 millions to do as they see fit with. No doubt this will be used against the PIK loans. The Interest of which rolls over and by 2017 when the bonds mature and that 500 plus millions has to be paid back to INVESTORS the PIK loans unless adressed will also be at a level of plus 500 millions. Its a mess no matter how you shake It up..and very very risky for the well being of the club. If they lose the power on the pitch, stop winning things, finish out of the top four two seasons running they are GONE!..

 

[2sheikhs]

They don't need an investor,it's a benefactor or philanthrapist they need.It's just a short term fix.An easy example is,say your current account is £1500 overdrawn.You re-mortgage your house with a cash-back option,which gives you £1500.You pay off your overdraught but the mortgage has an extra interest rate added to recover the £1500.The longer the glazers stay at the theatre of coat-hangers,the less likely they can shift it on to somebody else.And why would they?Out of the companies they own,only the scum returns a profit, which pays the debts.Anyway you look at it,it's bad news.......if you support the scum.For me,it's the mutts nuts.

 

[fbloke]

Some interesting wrinkles that are not getting the press they deserve as it isn't in the headlines of the re-financing package.

a) There were severe financial penalties and restrictions placed on Utd under the old financing which are now lessened, the main two were about missing payments and asset movements. Basically the Glazers were in a financial straightjacket that was about to have its straps tightened because of non-payments (cash flow issues)

b) The Glazers were not allowed to re-allocate any assets of the club as the original loans were in essence g'teed against them. The Glazers are now able to make hay whist the son shines and do what they want with Utd's valuable bits - so they can wave bye bye to them I expect.

c) The removal of up to £70m from the club under the new arrangements will no doubt alleviate the PIK situation ahead of all others, why? Because the PIK notes are the ONLY debt the Glazers are PERSONALLY liable for.

d) This new arrangement would (unlike the original leveraged positions) allow the Glazers to do the following -

Draw out cash up to £70m
Pay other Glazer companies
Transfer ownership of assets to other Glazer interests
Remove any liability they have for debt, whilst piling the club with it.
Pay interest quarterly so that the amount payable is more manageable from smaller deals (sell a player in Summer, in Jan would cover 2 of those)

Now go on you tell me what that all adds up to?

A club with massive debt owed in 2017 but no assets and owners with no personal liabilities.

Now tell me where that leads?

 

[Mantel]

Now tell me where that leads?

To a Leeds?

 

[Rag formerly known as Lemon]

sumitted twice - what a thick c**t

 

[Rag formerly known as Lemon]

Some interesting wrinkles that are not getting the press they deserve as it isn't in the headlines of the re-financing package.

a) There were severe financial penalties and restrictions placed on Utd under the old financing which are now lessened, the main two were about missing payments and asset movements. Basically the Glazers were in a financial straightjacket that was about to have its straps tightened because of non-payments (cash flow issues)

b) The Glazers were not allowed to re-allocate any assets of the club as the original loans were in essence g'teed against them. The Glazers are now able to make hay whist the son shines and do what they want with Utd's valuable bits - so they can wave bye bye to them I expect.

c) The removal of up to £70m from the club under the new arrangements will no doubt alleviate the PIK situation ahead of all others, why? Because the PIK notes are the ONLY debt the Glazers are PERSONALLY liable for.

d) This new arrangement would (unlike the original leveraged positions) allow the Glazers to do the following -

Draw out cash up to £70m
Pay other Glazer companies
Transfer ownership of assets to other Glazer interests
Remove any liability they have for debt, whilst piling the club with it.
Pay interest quarterly so that the amount payable is more manageable from smaller deals (sell a player in Summer, in Jan would cover 2 of those)

Now go on you tell me what that all adds up to?

A club with massive debt owed in 2017 but no assets and owners with no personal liabilities.

Now tell me where that leads?

That's about the size of it, but you forgot to mention the 75m overdraft that's been negotiated, that will almost certainly be used (probably on transfers in an attempt to fool the fuckwits into thinking the money was there all the time and they weren't being raped after all) which will also have to be repaid

 

[bluwes]

I'm breaking my own rule by making a Rag thread, but fuck it.

<a class="postlink" href="http://news.bbc.co.uk/1/hi/business/8475317.stm" onclick="window.open(this.href);return false;">http://news.bbc.co.uk/1/hi/business/8475317.stm</a>

Manchester United raise £504m in bond issue
Old Trafford
Manchester United was bought by the Glazers in 2005

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.

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.

Anyone know what the fuck it means?

Its like you or I paying off our credit card bills by taking out a bank loan because the interest rate is lower. You still have the same debt to pay off but at a lower rate of interest