The Manchester City owner is raising $ 650 million in one of football’s largest debt contracts

Manchester City’s parent company has raised $ 650 million in one of football’s largest debt contracts as it seeks to increase investment in its international network of football clubs.

City Football Group, the Abu Dhabi-controlled holding company Champions of the English Premier League along with clubs in the United States, Australia and India, they recently raised the loan, which will arrive in July 2028, according to several people familiar with the transaction.

The debt deal exceeds the € 525 million refinancing deal between Goldman Sachs and Spanish FC Barcelona agreed in June, and is roughly the level of English side Tottenham Hotspur, who borrowed £ 637 million in 2019 at several banks to build their new stadium.

CFG intends to use the money to fund infrastructure projects such as a new stadium for its Major League Soccer New York City FC franchise, which has been discussed for years but still requires approval of local authorities.

But the group has shown a desire for rapid growth as it has acquired full ownership or bought minority shares in ten clubs around the world over the past decade.

The seven-year loan was taken out by Barclays, with HSBC and KKR Capital Markets helping to organize and distribute the debt, according to people familiar with the deal.

Separately, CFG has also set up a £ 100 million revolving credit mechanism with the same funding providers, although one person close to the group said it had no immediate intention of withdrawing from the facility. lation.

CFG declined to comment. People close to the deal said their executives had opted to increase debt, believing it was a cheaper way to collect than to sell more equity.

CFG sold a 10% stake two years ago at US-based private equity firm Silver Lake Partners for $ 500 million, which valued the group at $ 4.8 billion, a record valuation for a sports group. A further 12% is owned by China Media Capital, a venture capital group.

The majority owner is Sheikh Mansour bin Zayed al-Nahyan, a billionaire from the ruling family of Abu Dhabi, who bought Manchester City in 2008.

Approximately £ 1 billion has been invested in transforming the club of a fellow runner into one of the more successful sides in English football.

Critics have suggested that the spending has skewed competition in England and Europe, while human rights activists say it is part of a “sports laundering” project designed to clean up the UAE’s global image. The brother of Sheikh Mansour is Sheikh Khalifa bin Zayed al-Nahyan, the de facto ruler of the Gulf nation.

The new debt agreement links the group with Western financial institutions. A year after Silver Lake’s investment in CFG, it did secured $ 2 billion of Mubadala, the Abu Dhabi sovereign wealth fund, headed by Khaldoon al-Mubarak, who is also president of Manchester City.

The money will help support the group of losses whose finances have been severely affected by the pandemic.

CFG’s annual revenue fell to £ 544 million during the year ended June 2020, with a drop of almost 14% year-on-year due to the loss of ticket and transmission revenue. The group’s annual net loss extended to £ 205 million (£ 84 million the previous season).

Manchester City’s revenue fell to £ 478 million in the 2019-2020 season, down from £ 535 million the previous year. The club earned a net loss of £ 126 million from a net profit of £ 10 million. It had previously been the only for-profit club on the CFG global network.