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Man Utd bond issue value tumbles

Wed 3rd Feb 2010 | Money & Finance

It has been widely reported today that the value of bond issue aimed at refinancing Manchester United’s debt has dipped dramatically.

The club secured the £500 million ($798m) needed to refinance its bank debt after embarking on a series of  ‘road shows’ across three continents to support the 322 page prospectus given to potential investors. However, analysts have warned that the value of the bonds issued has plummeted and that they been the one of the markets worst performers this year.

The bonds, split into Sterling and Dollar denominated bonds have lost a significant portion of their value. The £250m of sterling-denominated bonds has dipped to 93% of face value whilst the bid price of $425m for the dollar-denominated bonds has fallen to 94.5 per cent of face value.

It is not expected that Manchester United will return to the market any time soon with another bond issue as they wait to reduce the debt before returning.

With an annual interest bill of £45 million on the bonds, similar to the £41.2 million paid in the last financial year, there have been calls for the Glazers to sell up and fans have become increasingly disenchanted by the situation off the field.

It was revealed at the weekend that a group of wealthy Manchester United fans had approached Keith Harris of Seymour Pierce about the possiblility of a buyout of the Glazers.


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