Manchester United considering £600 million bond issue
The controversial Glazer family, the owners of Manchester United, are said to be in talks regarding a potential debt refinancing with a £600 million bond issue under consideration. It is believed that the family has appointed JP Morgan and Deutsche bank to look into potential refinancing issues amid concerns that the growing debt problem has the potential in the long term to impact upon the underlying football business.
While many Manchester United fans were angered when the club was taken over back in 2005 there is no doubt that the Glazer family has been very supportive of the club and the manager Alex Ferguson's transfer policy. However there are a number of debt issues to take into consideration in the short to medium term and the owners are taking a perfectly sensible approach by employing two city giants to look into the situation.
While there is no immediate concern about the company's ability to refinance the substantial debt, there is some concern about so-called payment in kind debt taken on by the Glazer family which is rolling up interest at a rate of 14.25% a year. The Glazer family, not Manchester United, are liable for the payment in kind loans which have increased in value from £130 million when it acquired the business to £175 million today.
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