Manchester United paid out £54m to raise £500m in controversial bond issue

City A.M. Reporter
Manchester United’s controversial bond issue is understood to have cost the Premier League champions £54m.

As part of the £500m in funds raised by United last week, the club is believed to have had to pay £15m in fees and expenses to investment bankers and lawyers. The club had also taken a £39m hit from the unwinding of interest rate hedging arrangements on the debt that has been refinanced by the bond.

Although the Glazer family, the American leisure tycoons who bought the club in 2005, have managed to defer payment of some liability, the club is understood to still be paying £11m of it up front.

News that the bond issue has cost United so much will further upset fan groups after it emerged last week the club is saddled with rising debt partly due to high interest payments. Debts at parent company Red Football Joint Ventures Limited hit £716.5m in the year to June 2009, its accounts showed. Net interest for the period was £68.5m.

Saturday supporters demonstrated outside Old Trafford before the 4-0 Premier League victory over Hull City that saw United regain top spot in the standings. Fans were chanting “Glazers Out” even after Wayne Rooney opened the scoring.

United manager Alex Ferguson used his program notes to appeal for unity in the face of the financial pressures facing the club and the opposition from fans to the Glazers.

Ferguson wrote: “Some of our fans are clearly unhappy with the financial position but we mustn’t allow the situation to become divisive.”

He said: “The danger... is that we could be presented as being split, which would be harmful and inaccurate because I believe the vast majority of United fans are behind us.”