Tuesday, 2 March 2010

Ticking up

If (enormous if), Red Football Ltd was sold by the Glazers, the bond holders have to be paid back straight away (at 101% of face value).  It wouldn't necessarily happen as the new owners could do a deal with the bond holders, but the right to repayment on "change of control" is embedded in the bond documents.

It is therefore interesting to look at what the bond price has done today as bid rumours swirl around....

They've gone up, by a noticeable amount:

I know 2.3% may not sound much, but in bond world it matters.

What does this prove?  Well nothing of course, but however "not for sale" United may be, the bond market appears to think the question is a little more nuanced than the club would have you believe.

PS.  You have to pay for your own coffee at Soccerex....!



Luke Robbins said...

Thank you for taking the time to go through things like this and spelling out to fans like myself, who don't really understand complex financial things such as this.

Will be tuning in this evening, I presume it will mostly be full of United/Pompey chat due to the current media interest.


Red Kharma said...

Might it not indicate there are already 'Red Knights' in the market with a bid on the bonds or someone front running in anticipation of this?

Do you have a list of the existing bond holders Anders?


United Rant said...

Andy - check out the Glazer lies on the beeb today:

United Rant said...

Also that makes the bid price range ...?

James said...

Hi Andy,

How big an impact do you think the half-year/second quarter financial results released on Tuesday had on this rise in the bond price? Difficult one to answer I know! The 'Red Knight' talk and the strong financial results make a good combination for a rise in bond price anyway!


Anonymous said...

James, I work in the HY market and most of the rise came on the back of the Red Knight story, which came out before the results. The results were seen as good (although there was definitely a timing issue with more home games played than last year) and helped firm it up but it was really the Red Knight story. Most people seem to think such a takeover is unlikely at this point but some folks are willing to take a punt on it.

Red Kharma, I can't speak for the owner of this blog but the list of bondholders is not in the public domain. The banks who ran the deal would have the list of original allocations but there would obviously have been buying and selling since then so holders would have changed somewhat (although probably not massively). On Bloomberg you can often see the list of main holders of the bond, which is periodically updated but I checked recently and the MANUTD bond doesn't have that info yet.
My sense is there some hedge funds in there as "anchor" investors, a load of US hedgies (based on the type of people asking questions on the call), a limited number of UK traditional institutions, some Asian investors and a biggish retail element that would have distributed to high net worth individuals via the private wealth management arms of the banks on the cover of the deal.

andersred said...

Anonymous above beat me too it, I concur with everything he said.

I was very keen to write it before the Q4 09 release so the only price impact was from the RK story.

Times business section have a comment on the price move today (I won't sue for breach of copyright).