hi,
the way the discussion is going, are we assuming that the 500m bond will be snapped up as soon as they are available? is that a bit premature?
surely, investors will know their returns is closely tied to whatever MUFC achieve on the pitch cause it will directly affects all the cash flowing in, given all things are closely connected/knitted.
1) so can we safely said that MU still have to win something major so as to improve investors' confidence??
2) there are talks about SAF's position cause he is not going to last forever, will that be a consideration for investors?
3) Does Glaciers invests quality into the squad so as to indirectly "bait" people for the 500m bond, is that a valid consideration?
(my questions may be swayed by the ABU's so pardon me).
Originally posted by iceFatboy:hi,
the way the discussion is going, are we assuming that the 500m bond will be snapped up as soon as they are available? is that a bit premature?
surely, investors will know their returns is closely tied to whatever MUFC achieve on the pitch cause it will directly affects all the cash flowing in, given all things are closely connected/knitted.
1) so can we safely said that MU still have to win something major so as to improve investors' confidence??
2) there are talks about SAF's position cause he is not going to last forever, will that be a consideration for investors?
3) Does Glaciers invests quality into the squad so as to indirectly "bait" people for the 500m bond, is that a valid consideration?
(my questions may be swayed by the ABU's so pardon me).
1) I do agree. United will have to win the English title a few more times next decade. Considering that we have just lost Ronaldo and and faced an unprecendented injury crisis, we are still merely 2 points away from Chelsea. Once Rio and Vidic returns next season together with Owen Hargreaves and few new players, I believe we can mount a sustainable challenge.
But ultimately, as a bond investor, I would be more interested in United's revenue generating business as opposed to its exploits on the field. If United went on a barren 5 year run, but managed to increase its sponsorship, tv revenues, matchday sales and overseas tours, I will be even more happy! Remember a bond-holder doesn't own a single piece of United - he is merely a creditor. His money is stuck with United for 7 years and he cannot do anything about it unless United fails to pay him his interest or is unable to repay his principal once the debt matures in 2017.
2) In an IPO or Bond prospectus, it is necessary for every company to list out ALL potential risk involved that may cripple the company no matter how unlikely it might be. SAF is already going to be 70 so it is unlikely he will carry on to 2017 so there is a risk that he might leave by then.
3) The bond will be a done deal by the end of the season so I doubt that will happen. Investors will be more concerned with Glazer's financial statements rather than United on-field performance. Most of this financial instutions in America ain't soccer fans - they would regard Ronaldo's sale as a brilliant move since it made over 65 million profit over a 12 million investment.
thanks for answering.
Agree with you somewhat, but somehow,still think the MUFC's success on the pitch will equate to more sponsonship, tv revenues, and etc. Given, MUFC is a global brand,things may change.As per one abstract example, Tiger Woods' case.
**Touch wood, do not wish to see the impact of a barren spell. .
never entrust your money with americans.
americans love to accumulate debt. i cant believe they actually took a loan where they have to pay 14% interest per annum. my man utd friends also think they're fuuking insane.
these americans buy EPL clubs hoping to make a quick buck only.
generally speaking, the way they are managing their balance sheet looks like a strange reverse ponzi scheme. all the prize money is just being used to service ballooning debt interest payments, not mentioning about the principal.
but man utd worst case shld be able to sell to some oil shiek or rich arab. they got a strong brand name ultimately.
We must understand that the credit crunch has derailed Glazer's plans. He never had any intention of keeping the PIK notes or the original senior notes. I believe the bond issue or cheaper bank loans was always in his mind but the credit crunch curtailed his plans since it made debts very expensive unlike in 2007 where debt was abundant and cheap.
The PIK notes has 14% interest which may seem high but most corporate loans tend to be charged at 5-8% and that is if your balance sheet is pretty good. Glazer intended to buy a billion dollar asset with only 30% cash on the table - most banks will only match you by the dollar so Glazer was forced to turn to other sources of funding which is none other that our dear hedge funds (aka loan sharks). I believe Glazer initially wanted to refinance the PIK notes but the terms of senior notes demand that the bank loan be paid first prior the PIK. So Glazer has no choice but to pay up the bank loan first. So 2008 came and we were hit by the subprime mortage and the credit crunch in 2009. Now it is 2010, and the debt is ballooning so Glazer has no choice but to turn to bonds to repay the senior notes. He will then use the club operating profits to repay the PIK notes slowly.
I don't know the exact terms but this is what I gleaned from tabloids (which ain't accurate as well).
Seriously, United gotta pray some rich man take over the Club haha !!!!!!!
But even then, it may not be a good thing hiaz....
It would be preferable if any downfall was for football, rather than financial, reasons, but both elements need expert management to produce success.-- thank you for this information.
I fear that Glazer may start making comparision with Liverpool though - its revenue remains strong despite it never winning a title for 2 decades. But Fergie will voice out if Glazer ever adopted such a tactic.
What this all about, I'm lost to this topic.
Man Untd VS Man city Later! wohooooo! for now i will bet for the City. Lah I lose on their last game by 1000bucks for man untd ><
Originally posted by iceFatboy:hi,
the way the discussion is going, are we assuming that the 500m bond will be snapped up as soon as they are available? is that a bit premature?
surely, investors will know their returns is closely tied to whatever MUFC achieve on the pitch cause it will directly affects all the cash flowing in, given all things are closely connected/knitted.
1) so can we safely said that MU still have to win something major so as to improve investors' confidence??
2) there are talks about SAF's position cause he is not going to last forever, will that be a consideration for investors?
3) Does Glaciers invests quality into the squad so as to indirectly "bait" people for the 500m bond, is that a valid consideration?
(my questions may be swayed by the ABU's so pardon me).
Looks like the bond was snapped up within a week to 10 days... In fact it's was twice over-subscribed...
Originally posted by zocoss:
Looks like the bond was snapped up within a week to 10 days... In fact it's was twice over-subscribed...
given the interest rate, let's hope it can be properly managed..
generally speaking, the way they are managing their balance sheet looks like a strange reverse ponzi scheme
Originally posted by Ashianamarley:generally speaking, the way they are managing their balance sheet looks like a strange reverse ponzi scheme
Why do you say that ??? It is very common among companies to launch new debts to repay old debts in order to extend their debt maturity profile. If you have a housing loan and a better one with longer maturity comes along, wouldn't you switch over ???