Transfer United Till I Die
I am totally in the know, honest
Didn't we sign Rooney in 2005?
2004didn't we sign rooney in 2005?
2004, but I think I remember a Gill interview saying we spent 2005's budget a year earlier in order to acquire Rooney. We only moved for him when we did because Newcastle made a bid.Didn't we sign Rooney in 2005?
No they are only irrelevant to you.It is completely irrelevant when all that matters now is the club's/Red Football's operating performance and its ability to service its borrowings whilst at the same time making sufficient cash available for capex.
Those headlines played a major part in all the BS that has been spouted and continues to be spouted about United's finances. You understand that surely?
We're going to have the exact same scenario for the 2009/10 year results. Red Football Limited will report a c.£80m accounting loss but crucially that figure will include c.£105m of completely irrelevant non-cash charges and one-off exceptional costs. I haven't included the depreciation of fixed assets and amortisation of player registrations in that figure because those items obviously are relevant.
I can see the media headlines now. They won't mention those c.£105m of expenses and will instead simply say: ''United make £80m loss!!! That's what happens when the club aren't able to sell a player for £80m every year!''
And 90% of people will take those headlines at face value.
The Glazers planned a net spend of £25m annually back in 2005- that is £25m plus what they get from selling player. In a report (c 2006) by their bankers, JPM, the net spend was to increase by 10% after 5 years to £27.5m to allow for transfer fee inflation; there was also mention of the odd 'superstar' fund of £25m. In the recent credit report, released earlier this year, the projected net-spend for the next 5 years is still £25m. There is no mention of a superstar fund. Now, a flat £25m over 10 years is significantly worse if you take in to account transfer fee inflation over that time. In any event, the actual net spend over the last 5 years was much lower than their allowance. The accumulated deficit to date is about £95m or the Ronaldo money plus a bit and by coincidence that was the amount of money in the club's bank account (£96m) as at 31 March 2010.As for your second point. There could well be postive changes to working capital which cancel out the impact of the £9m pa already received from the AON deal. I also wouldn't discount the management fee from the projected £100m EBITDA for next year. Remember that there was a management fee of £3m paid in the 2008/09 year when EBITDA was £91m.
So I think we're looking at c.£50m cash available to spend on capex with a maximum of c.£23m of that available as a dividend. It goes without saying that the Glazers won't take out the maximum allowed dividend every year. When you consider that the club's current cash balance could comfortably allow for the PIK loan to be stabilised in the short-medium term with immediate one-off dividend payments of up to £95m, then I really don't think there are legitimate reasons to be concerned about the club's ability to finance considerable annual net transfer expenditure going forward.
Translation- 'you've been well and truly fecked!!'The Glazers won't take out the maximum annual dividend if it leaves United short of cash for capex on players, especially when it wouldn't be necessary to do so. That is common sense. The PIK loan can for example be stabilised with the one-off dividend payments and then refinanced at cheaper rates with Carrington used as additional security.
Net cash inflow from operations has been higher than EBITDA in every year since 2005, so I therefore think it's very likely that it won't be £9m lower than EBITDA going forward.
Have you actually seen the full terms of the PIK loan?The Glazers won't take out the maximum annual dividend if it leaves United short of cash for capex on players, especially when it wouldn't be necessary to do so. That is common sense. The PIK loan can for example be stabilised with the one-off dividend payments and then refinanced at cheaper rates with Carrington used as additional security.
Net cash inflow from operations has been higher than EBITDA in every year since 2005, so I therefore think it's very likely that it won't be £9m lower than EBITDA going forward.
No, I haven't seen the full terms of the PIK loan. What's your point anyway? Are you saying that the PIK loan can't be repaid (and therefore refinanced) with a new loan? That would be a ridiculous claim if that's your point.Have you actually seen the full terms of the PIK loan?
Also, how do you expect Carrington to be worth enough as additional security given the bond constraints on it? It's not as if it can be taken by the hedge fund and used for other purposes like housing or other redevelopment.
In any event, it's difficult to see how better refinance terms could be reached; we're still in the credit crunch shadow and we have 2 higher priority debts on the books- the 500+ bond and the £75m RCF.
Perhaps, GCHQ, you could come up with a rate and justify it?
Also, the £75m RCF would enable the club to borrow (to boost player net spend) at a rate lower than the PIK. Why retain dividends costing 14+% pa, if you can borrow for player capex at a lower rate?
They would be far more likely to try pay off the PIK debts before spending the money on players.The Glazers won't take out the maximum annual dividend if it leaves United short of cash for capex on players,.
His point is, if you don't know whats contained in it, then stop running about telling people what can and can't be done with the PIK notes.No, I haven't seen the full terms of the PIK loan. .
Telling him to hush on a topic he isn't fully versed in is a bit fecking rich coming from you. Still, I guess he could just have made it up instead......His point is, if you don't know whats contained in it, then stop running about telling people what can and can't be done with the PIK notes.
I've sought counsel with a financial friend - beats pushing on blindly like you and GCHQ are doing.Own up URR - who is writing your posts?
The point is that you haven't a clue what can and can't be done under the rules of the PIK. You have no idea of any penalty clauses, refinancing dates or other intracacies associated with them yet you seem happy to state things as fact.No, I haven't seen the full terms of the PIK loan. What's your point anyway? Are you saying that the PIK loan can't be repaid (and therefore refinanced) with a new loan? That would be a ridiculous claim if that's your point.
We know Carrington can very easily be transferred to RFJV Limited with the club paying a peppercorn rent. Now in the event of a default on a refinanced loan, Carrington would clearly be a very valuable asset to sell on/or lease to new owners of the club.
I'd justify a lower rate of interest because a) the operating performance of the club/Red Football Limited has greatly improved since 2006, b) Carrington is there as additional security, c) the restrictive bank loan convenants on the senior debt have been removed and d) the borrowing method could be different to the PIK loan which would allow for a lower interest rate.
As for your last point, you wouldn't want to rely too heavily on the RCF because that's obviously how you run into cashflow problems. I personally see there being enough available cash from the club's annual operations to a) service the bond interest, b) service the refinanced PIK loan interest and c) to allow for adequate player and maintenance capex.
I can say with total confidence that the terms & conditions of the PIK loan allow for it be fully refinanced with new borrowing/finance now that the restrictive bank loan convenants have been removed by the successful bond issuance.I've sought counsel with a financial friend - beats pushing on blindly like you and GCHQ are doing.
The point is that you haven't a clue what can and can't be done under the rules of the PIK. You have no idea of any penalty clauses, refinancing dates or other intracacies associated with them yet you seem happy to state things as fact.
Andersred estimates Carrington's worth with the bond attached to it, to a third party buyer, as £25m - £30m. How is that meant to securitise the PIKs?
Make your mind up. In this post you're seemingly questioning whether the PIK loan can be repaid and then in your post above this one you're saying that the Glazers would prioritize repaying some of the PIK loan over signing a new player.His point is, if you don't know whats contained in it, then stop running about telling people what can and can't be done with the PIK notes.
Fair enough - I did notice a complete change in posting style!I've sought counsel with a financial friend - beats pushing on blindly like you and GCHQ are doing.
I take it you've seen the terms and conditions then?I can say with total confidence that the terms & conditions of the PIK loan allow for it be fully refinanced with new borrowing/finance now that the restrictive bank loan convenants have been removed by the successful bond issuance.
Are you seriously suggesting that the terms & conditions of the PIK loan mean that it can never be repaid and that it will simply be converted into the full shareholding of Red Football Limited when it matures in 2017? That would be completely insane. Please tell me either your friend or yourself understands that?
This reminds of when MUST stated back in 2005 that the Glazers' business model was doomed to failure within three years but crucially without mentioning that the short-term high interest rate loan was always going to be refinanced shortly after the Glazers took control of the club.
Your point about early redemption fees is fair enough to some degree but you have to appreciate that the PIK loan was taken out four years ago and as such any penalty fee is now likely to be nominal (3% standard fee). As for refinancing dates, yes, it's certainly possible that there are only specific dates throughout the year that the loan could be repaid but clearly that doesn't prevent the Glazers from refinancing the loan.
As for Carrington, Andersred admitted himself that he really doesn't know how much it's worth. I've personally seen some estimates that it's worth £40m-£50m. I've never said that Carrington was going to fully securitise the refinanced PIK loan but clearly if we were looking at new borrowing of say £130m then it would make a considerable difference in terms of securing a lower rate of interest.
Are you seriously acting stupid or just doing it to try and brush aside what I wrote?I can say with total confidence that the terms & conditions of the PIK loan allow for it be fully refinanced with new borrowing/finance now that the restrictive bank loan convenants have been removed by the successful bond issuance.
Are you seriously suggesting that the terms & conditions of the PIK loan mean that it can never be repaid and that it will simply be converted into the full shareholding of Red Football Limited when it matures in 2017? That would be completely insane. Please tell me either your friend or yourself understands that?
This reminds of when MUST stated back in 2005 that the Glazers' business model was doomed to failure within three years but crucially without mentioning that the short-term high interest rate loan was always going to be refinanced shortly after the Glazers took control of the club.
Your point about early redemption fees is fair enough to some degree but you have to appreciate that the PIK loan was taken out four years ago and as such any penalty fee is now likely to be nominal (3% standard fee). As for refinancing dates, yes, it's certainly possible that there are only specific dates throughout the year that the loan could be repaid but clearly that doesn't prevent the Glazers from refinancing the loan.
As for Carrington, Andersred admitted himself that he really doesn't know how much it's worth. I've personally seen some estimates that it's worth £40m-£50m. I've never said that Carrington was going to fully securitise the refinanced PIK loan but clearly if we were looking at new borrowing of say £130m then it would make a considerable difference in terms of securing a lower rate of interest.
No, you really need to learn to read.Make your mind up. In this post you're seemingly questioning whether the PIK loan can be repaid and then in your post above this one you're saying that the Glazers would prioritize repaying some of the PIK loan over signing a new player.
Well then it's a pointless suggestion because even if there is an early redemption fee, it simply won't be large enough to make any notable difference to the Glazers' refinancing plans.Are you seriously acting stupid or just doing it to try and brush aside what I wrote?
As if anyone would take out a loan that could never be repaid.
The suggestion is simply that there is no way of knowing, without seeing the terms and conditions of the PIKs what can and cannot be done. Think about mortgages - different types of mortgages aside, even fixed rate mortgages have different terms and conditions from product to product and even from person to person for certain credit histories. You don't know if there's an early refinancing penalty fee for example.
It's common sense, Fred. The PIK note convenants will not allow for the dividend payments to be used for anything other than repaying that debt.No, you really need to learn to read.
I have said that we do not know the full terms and conditions laid down in the PIKs and there is the possibility that they could use funds for other things rather than pay off hte PIK notes. YOu have said this is illegal and not possible because the PIK notes don't allow for that to happen.
Now you're saying you don't know what the terms and conditions are.
It therefore follows that if you don't know what the T+Cs are , you cant say what they do and do not allow.
Hardly. His financial friend is just making techincal points which aren't relevant to Red Football/RFJV Limited's financials.He he. UnitedRoad's showing up GHQ and all.
Its becoming a regular thing now, he really needs to save some face and give up. The vast majority of our fans know that the Glazers cannot afford to sustain our great club and if they had any thought for the fans they would put the club on the market before they do any more damageHe he. UnitedRoad's showing up GHQ and all.
As you said in another thread, you dont deal in speculation.It's common sense, Fred. The PIK note convenants will not allow for the dividend payments to be used for anything other than repaying that debt.
How would you know? When you look at the previous refinancing, they've taken yet more tens of millions of dead money out of the club. Say it's £20m. That's more money dumped out of capex on players or stadium improvements, or dumped on ticket prices to cover it.Well then it's a pointless suggestion because even if there is an early redemption fee, it simply won't be large enough to make any notable difference to the Glazers' refinancing plans.
Thing you'll find it's the bond convenant, not the PIK note convenants. Besides which, I thought consensus on here was already that the debts that could be paid off was (necessarily/intentionally?) ambigious.It's common sense, Fred. The PIK note convenants will not allow for the dividend payments to be used for anything other than repaying that debt.
I still don't see what value Carrington can have as a security. Given the PIKs are already secured against RFJV's assets, which is its total ownership off all shares in Manchester United, the owners of, erm, Carrington, then what good will it do securing the PIKs against all of Manchester United plus part of it again? That's like me taking out a mortgage on my property then seeing if I can secure the same mortgage against my gargage, which is already part of said property. It simply doesn't stack up.As for Carrington, Andersred admitted himself that he really doesn't know how much it's worth. I've personally seen some estimates that it's worth £40m-£50m. I've never said that Carrington was going to fully securitise the refinanced PIK loan but clearly if we were looking at new borrowing of say £130m then it would make a considerable difference in terms of securing a lower rate of interest.