IMUSA News
Bonds Slump in Struggle for Investor Support
26th January 2010
Manchester United Bonds Slump in Struggle for Investor Support
By John Glover Jan. 26 (Bloomberg)
Manchester United is losing the support of institutional investors for its bonds, which have been marked down by 4.5 pence on the pound since trading began.
The 250 million pounds ($403 million) of 8.75 percent notes the English soccer champion sold at 98 pence in the pound Jan. 22 slipped to as low as 93.5 pence, according to HSBC Holdings Plc prices on Bloomberg. The notes, issued to refinance debt the Glazer family used in a leveraged buyout in 2005, were priced to yield 9.125 percent and now yield 10.1 percent.
Jim O’Neill, Goldman Sachs Group Inc. chief global economist, a fan of the club and a former shareholder and director, said he didn’t buy the bond because there is “too much leverage going on.” The club held investor presentations in Europe, Asia and the U.S. seeking to drum up investor interest.
The issue “was bought by investors who aren’t specialists in valuing high-yield bond investments,” said Julien Rerolle, head of credit research at Spread Research in Lyon, France. “The price was not the price that institutional investors expected,” he said.
The club also sold $425 million of 8.375 percent notes, increased from a planned $325 million, priced at 98 cents on the dollar to yield 8.75 percent. The bonds were quoted at 95.5 cents today to yield 9.26 percent, according to HSBC.
