Manchester United have cut their interest bill by £10m a year after a major refinancing through Bank of America. The refinancing deal on £177.78m of sterling bonds and some $17m of dollar bonds means that interest rates on the loans of between 8.75 per cent and 8.375 per cent will be replaced by a variable rate. Analysts expect interest rates to remain low for some years to come.
Manchester United have cut their interest bill by £10m a year after a major refinancing through Bank of America. The refinancing deal on £177.78m of sterling bonds and some $17m of dollar bonds means that interest rates on the loans of between 8.75 per cent and 8.375 per cent will be replaced by a variable rate. Analysts expect interest rates to remain low for some years to come.
United’s present debt is £370m, the amount remaining from a highly leveraged takeover by the Glazers in 2005. It was widely argued that this was not sustainable or at least would hold back United on the pitch. However, since then the club has won five Premier League titles and played in three Champions League finals.
What this deal shows is that, particularly since its float on the New York Stock Exchange, the club has clout on international financial markets. By any standards it is a medium-sized company, but it has the advantage of possessing a global brand.