Rugby club Wasps to raise £35m in retail bond offering

Tim Wallace
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Only one-third of the club’s revenue now comes from rugby, having diversified into events
Rugby club Wasps is raising up to £35m of debt in a retail bond offer, hoping to tap up fans with a payout of 6.5 per cent on the debt instruments.
It is pitching the paper as a safe investment, on the basis that the vast majority of its income is in fact not rugby-related – two-thirds of its revenues come from other sources such as music events and conferences.
Sporting investments are notoriously risky, pushing Wasps to diversify away from the game as a sole source of income.
Past troubles at the club are one reason why the company would rather tap up retail investors than go to a bank – the club flirted with insolvency in 2012.
“We’ve had some ups and downs in financial terms, and the club still loses money, although the arena itself is strongly profitable. It is not attractive to go to a bank with that history,” chief executive David Armstrong told City A.M.. However, he hopes the recovery story will appeal to fans and others who recognise the brand: “I think we will get a pretty wide base of people interested because of the brand. And it is structured with a modest initial investment of £2,000, which may be attractive to the fans.”
The order book for the bonds, which mature in 2022, opens today and closes on 6 May.
The funds will be used to restructure the club’s debt, paying off a £13.4m loan from Coventry Council which was acquired with the Ricoh Arena, as well as a more expensive £4m facility with Close Brothers. It will also pay off a shareholder loan. The rest will be used for working capital purposes.
Wasps has hired Investec to manage its bond sale. The securities will be tradable on the London Stock Exchange.


1 Ian Dixon heads debt capital markets origination at Investec. Other recent retail bond issuances include deals for Eros International, Burntwood and Unite Group.
2 Before moving to Investec in January 2012, Dixon spent time at Evolution Securities and nine years at Ambac Assurance – including two years as its chief executive. He also has decades of experience working at NatWest and RBS.
3 One factor behind Wasps’ decision to hire Investec was the club’s chief’s previous work with the investment bankers – he has experience with the advisers from his time at Diageo.

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