Manchester United said last night it was seeking to raise £500m through a bond issue to alleviate its £699m debt burden.
The Premiership club had been expected to raise £600m via a bond issue. Its finance arm will issue senior secured notes due 2017 to refinance existing debt secured against the club. Last year United’s annual profit of £72m was almost wiped out by interest payments of £69m.
Old Trafford’s owners, the American Glazer family, bought the club for £828m in May 2005, funding one third of the deal with equity, one third bank debt and one third with a payment-in-kind note.
Manager Sir Alex Ferguson has denied that the club’s debt pile has affected his spending on players. Since the Glazers’ takeover of the club, Ferguson has spent a net £32m on new players. He has claimed that his reluctance to spend the record £80m United made from selling Cristiano Ronaldo to Real Madrid last summer was purely because he “couldn’t see any value in the market”.
Last week the owner of Manchester City, Sheikh Mansour bin Zayed al Nahyan, wrote off £304.9m of personal loans to the club to make it debt free.