Things may be looking up on the pitch for Manchester United, but the market doesn’t like their bonds very much. Of course, the club has already trousered the money, but they may find it more challenging if they come back to the market in the future. The bonds have become one of the worst performers this year. Of course, they were mainly bought for the interest ‘coupon’ rather than capital gain. However, the sterling bonds have fallen to just 93 per cent of the value. If the investor had splashed out around £100,000, they would have already made a paper loss of £5,000.
Things may be looking up on the pitch for Manchester United, but the market doesn’t like their bonds very much. Of course, the club has already trousered the money, but they may find it more challenging if they come back to the market in the future. The bonds have become one of the worst performers this year. Of course, they were mainly bought for the interest ‘coupon’ rather than capital gain. However, the sterling bonds have fallen to just 93 per cent of the value. If the investor had splashed out around £100,000, they would have already made a paper loss of £5,000. The dollar denominated bonds have done slightly better with the bid price falling to 94.5 per cent of face value. Analysts suggested the bonds had been priced too highly at launch and also referred to the lack of a credit rating. However, the club has no plans to return to the market and it has been suggested that a greater priority is placating fans angered by the bond issue. Their reaction has reached the point where it threatens to cause reputational damage to the club and no global brand wants that.