MANCHESTER United may be forced to price its £500m bond at slightly more than a 10 per cent yield, according to one of the City’s high yield analysts.
Jonathan Moore at Evolution Securities told City A.M. yesterday that very few of the City of London’s investors would warm to the deal due to its high risk nature.
“If you look at the numbers, the United figures look far riskier than comparable issuers,” says Moore. “United’s debt is 4.5 times its ebitda, compared to Virgin Media, for example, which is on a multiple of 2.2 times.”
Moore thinks, however, that United will attract sufficient investors across the world to take up the issue in its entirety.
United, whose financial advisers include JP?Morgan, Bank of America and RBS, is promoting the bond issue in the far east, the US and elsewhere.
Manchester United is launching its bond at a time of high demand, with institutions keen to take advantage of relatively high yields compared to the bank base rate.
However, football clubs are still considered as risky investments given that there is little in the way of security and revenues are so volatile.