Man U's Debt

[Exiled_red]

Well their bond issue was successful.Not exactly sure how it helps since interest on the bonds is 45 million as opposed to 41 million on the current loans

Manchester United have successfully raised £504million through a controversial bond issue that has caused some opposition from fans.

The money will enable United to pay off most of the club's current £509m debt and could help the Glazer family tackle the £202m payment in loans which continues to grow.

Red Devils officials, including chief executive David Gill, have been on a world tour to drum up interest in the bonds, which will run until February 2017.

Doubt was cast over the prospects of being able to sell them, but they have been over-subscribed.

However, the interest payment on the bonds will be £45m compared to the current £41million on the bank loans.

A spokesman for the Glazer family claimed the deal will bring a 'transparency' to United's finances for the next seven years.

The deal is expected to give the club's owners more flexibility in the running of the Old Trafford outfit, and could bring them leeway to make some new signings.

http://www.skysports.com/story/0,195...879235,00.html

What's the deal with this? People are saying this will pay off their debts and allow them more money to buy players, but surely they are just borrowing money from somewhere else to pay off existing debts, at most doesn't it just delay the time they have to repay by?

[Leyton388]

Sounds like when you take out a loan to pay a credit card off. You are just moving the debt somewhere else to get people off your back and give you more time.

[Darkon]

Sounds like when you take out a loan to pay a credit card off. You are just moving the debt somewhere else to get people off your back and give you more time.

correct, but sometimes it can also make it easier to do payments if you could get a lower interest loans, and if you can gather all your loans in one it's cheaper on the administrative part.

But if this is more expensive for them, I see little point in it

[Exiled_red]

correct, but sometimes it can also make it easier to do payments if you could get a lower interest loans, and if you can gather all your loans in one it's cheaper on the administrative part.

But if this is more expensive for them, I see little point in it

They should have been watching all the ads on daytime TV, they could have got a cheaper deal

[BillobShaisley]

It allows them to pay the higher interest payment in kind loans before clearing the bigger but cheaper debt. Also I think this would be at a fixed rate and they'll be gambling on a rate hike during the next 7 years.

[Craig_H]

[Exiled_red]

They've got their own TV channel you know...

[S-RED]

Sky Sports News understands that Fulham have accepted a bid from Manchester United for centre-back Chris Smalling.

Must have some money then.....

[S-RED]

Like father like son..........

Peterborough chairman Darragh MacAnthony has slammed former boss Darren Ferguson for unsettling players.

Every week brings another drama and it usually involves an ex-manager, a current team member and the promise of bigger wages followed by a derisory £100k bid and all this after the player has been unsettled and offered terms behind our back", MacAnthony said.

"Ask him (Ferguson) why in the last seven days he has offered terms to some of our players without agreeing terms with our club for them and of course totally unsettling these players."

[Tatterdemalion]

It allows them to pay the higher interest payment in kind loans before clearing the bigger but cheaper debt. Also I think this would be at a fixed rate and they'll be gambling on a rate hike during the next 7 years.

I don't think they are gambling on rates at all. They appear to have a hedging department which does this for them (or not! )

However, you are right. The point of raising this debt is so they can pay off the PIKs as, as things stood, they couldn't pay down the PIKs first as the other bondholders had seniority - they had to be paid off first.

Although it looks like ManU are fooked, I don't believe they are. Rolling over this debt is a sign that the Glazers are in a position to pay off the PIKs, which they will, which will then seriously increase United's ability to compete in the transfer market.

It's not great news tbh.