United’s £500m bond leaves investors nursing losses

February 3, 2010

Manchester United’s 500-million-pound (800-million-dollar) bond, the centrepiece of the club’s recent refinancing, has become one of the worst performing issues of the year.

The bond was fully subscribed, enabling the club to slightly reduce its debt-servicing costs and enjoy greater flexibility on future spending plans.

But investors have been left nursing paper losses which could make it hard for United to return to the bond market in the future, according to the Financial Times.

The bid price of United’s 250 million pounds of sterling-denominated bonds has dipped to 93 percent of face value while those denominated in dollars (425 million) were on offer for 94.5 percent of face value.

Bankers and analysts said the decline reflected over-pricing at the launch and the lack of a credit rating.

“In a benign credit market, Manchester United is one of the worst performing bonds since the beginning of 2009,” Suki Mann, a credit strategist at Societe Generale told the FT.

The bond issued by United has proved unpopular with fans because of controversial provisions contained in the prospectus.

These include the possibility of United’s Old Trafford stadium and Carrington training ground being sold and then leased back to the club, as well as authorising the transfer of funds from United’s reserves to the club’s parent company, Red Football Joint Venture Ltd.

The most recent accounts for Red Football, owned by the US-based Glazer family, showed that it had debts of 719 million pounds, including over 200 million owed to hedge funds in the form of ‘payment in kind (PIK)’ notes on which the interest rate now exceeds 16 percent.

United’s chief executive David Gill said at the weekend he was “100 percent convinced” the sale and leaseback of Old Trafford and Carrington would never happen and stressed that the Glazers, not the club, were responsible for repaying the PIK notes.

Gill also insisted that the club’s finances were not preventing United boss Sir Alex Ferguson from strengthening his squad, as many fans suspect.

LONDON (AFP)

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Ferguson in fresh bid to subdue fan fury over United debt

January 27, 2010

Sir Alex Ferguson has renewed his appeal to Manchester United fans to keep the lid on protests over the way the club is being run by its US-based owners, the Glazer family.

Ferguson used his programme notes for last weekend’s game against Hull to plead with United supporters to stay together.

There was little sign of off-field discontent spreading onto the pitch at Old Trafford on Saturday as England striker Wayne Rooney scored all the goals in a 4-0 win that saw champions United return to the top of the Premier League.

However, United fans have maintained their attacks on the Glazers in the wake of the club revealing, in accounts filed last week, that its debts had reached almost 720 million pounds by the middle of last year.

Ferguson said: “Fans are entitled to voice their disapproval about this or that. There’s nothing wrong with supporters complaining. If the team plays badly they are quite right to voice their disapproval. It’s their prerogative because this is their club.”

But the Scot made it clear he feels that the anti-Glazer movement will not help his squad’s cause.

“We don’t want a divided club,” he said. “We want the supporters behind the club all the time because we’re coming to the important part of the season. Everything is down to what we do as a team.

“The team, always the team, is the most important thing. We should never lose sight of that.

“All I’m interested in is that everyone buckles down to make sure we are successful, players and staff – but supporters in particular.”

Ferguson meanwhile has maintained he was not in the least surprised to hear Wayne Rooney commit his future to the club despite speculation linking him with a move to Real Madrid or Barcelona.

Rooney’s current deal expires in 2012 but Ferguson insists he is not worried that the England striker, 24, might want to leave Old Trafford.

He added: “I think we know where that is coming from. In fact, we are sure where it’s coming from. It’s not his agent. It’s not Wayne. So, we’ll deal with that.

“He wants to stay here. He has made that quite clear himself. But we knew that he didn’t want to leave here.

“He is in such great form there aren’t many players matching him at the moment. His scoring form has put him up in that frame.

“I’m not suggesting there aren’t plenty of other good players in the country and it’s not for me to judge who is the best.

“I am just happy with the form Wayne is showing. If he continues in this way he could get to 30 goals quite easily.”

MANCHESTER (AFP)

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Four-star Rooney sends United top

January 23, 2010

Wayne Rooney’s four-goal performance helped ensure Manchester United’s focus returned to on-field affairs as the defending Premier League champions moved to the top of the table for the first time in more than three months with a 4-0 victory over Hull.

Manager Sir Alex Ferguson has spoken of the need to give Rooney a rest but the England forward’s form and importance to his team make such a move unlikely any time soon.

It took Rooney just seven minutes against struggling Hull to illustrate the point perfectly to his manager and also to ease the pressure and growing dissatisfaction around Old Trafford in the wake of recent developments off the field surrounding American owners the Glazer family.

The announcement this week that United’s debts stand at 716 million pounds did not impress many of the club’s supporters, even though a successful 500 million bond issue will allow the Glazers to re-structure that debt.

Ferguson felt moved, in his pre-match programme notes, to call upon supporters to show unity behind their club and cease their anti-Glazer agitating.

However, as long as Rooney remains fit and in the sort of goal-scoring form he showed against Hull, United’s future does not look quite so precarious.

United’s first goal came after Park Ji-Sung played the ball into the path of Paul Scholes, who drilled in a vicious shot which Hull goal keeper Boaz Myhill could only parry.

Rooney responded more quickly than anyone else on the field, gathering the loose ball and steadying himself before burying his 17th goal of the season into the gaping goal.

Goal number 18 came in the 82nd minute after Myhill had made a poor job of dealing with a long-range Nani free-kick. Rooney himself kept the loose ball in play and Nani found the forward, who finished clinically from 15 yards.

The hat-trick was just three minutes away as the irrepressible forward ran in to meet Nani’s hanging cross and head into the goal from six yards.

For good measure, the 20th goal of Rooney’s increasingly remarkable season followed in injury-time as he collected Dimitar Berbatov’s neat flick, saw three defenders back off, and converted his shot from 12 yards.

Rooney, partnered by Michael Owen, who was making just his fifth league start of the campaign, was comfortably his team’s greatest threat, from early in the contest, and, midway through the first half, almost had a hand in two more goals.

First, he met Nani’s cross with a devastating shot on the turn which looped off a defender and behind for a corner. Then, seconds later, Rooney produced an audacious back heel which played in Owen but the former England striker was slow to respond and Andy Dawson made the recovering tackle.

Rooney was again the threat, just after the half hour, when George Boateng brought down Park on the edge of the area and Rooney curled a free-kick beyond the Hull wall and inches past Myhill’s right-hand post.

While United only led by a goal, there was still anxiety, not aided when Jonny Evans’ weak back header almost allowed Nick Barmby to equalize, his shot being saved well by Edwin van der Sar.

The other side of Rooney’s football personality was on display just before the half-time whistle when he was booked for hacking at Stephen Hunt out of frustration having just lost the ball badly to Ricardo Garcia.

Also before the interval, Owen was on the end of the move of the match, a flowing passing sequence which ended with Nani’s neat through ball and a weak tap straight at Myhill from the out-of-sorts striker.

It was a similar story after the re-start with United creating enough chances to win the game comfortably before Rooney put the outcome beyond all doubt with a devastating spell of three more goals in the final eight minutes.

MANCHESTER (AFP)