Manchester United bond issue in trouble
Despite the fact that the Glazer family, the owners of Manchester United football club, confirmed only last week that the club had raised around £500 million from bond investors, there is concern amongst investment markets today. The £250 million tranche of the sterling denominated bonds have fallen to just 93% of their original face value while the $425 million dollar denominated tranche has fallen to 94.5% of its original face value.
It is unclear as to why investor confidence in the bond issue would appear to have turned down so sharply in such a short space of time but the club appears little concerned at the moment with the £500 million already sitting in the company's bank account. It is not as if the bond issue was unexpected or in fact the situation with the club has changed over the last week, so it is a little bit of a mystery as to why the price has fallen so sharply.
Despite damaging headlines regarding the company's debt situation there are more than sufficient assets within the club to cover these debts and the company itself is still profitable. However, interest payments have increased significantly over the last two years which was the main concern of the financial markets.
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