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Arsenal sells football-ticket-backed bond
England - 17 July, 2006
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As was promised, English Arsenal issued and sold a GBP 260-million bond Thursday, the first publicly marketed, asset-backed bond issue from Europe's market in football revenues.
The two-part deal, backed by Arsenal ticket sales, will refinance the bank debt associated with the construction of the club's new Emirates Stadium in north London.
Arsenal will move to the stadium this fall after 93 years at Highbury. Ticket sales from the new 60,000-seat stadium will repay the bond. The club's 2006-2007 season tickets range between GBP 885 and GBP 1,825 each.
The deal included a fixed-rate tranche of GBP 210 million, which offered investors a life of 13.5 years and a spread of 52 basis points over United Kingdom government bonds.
A floating rate tranche of GBP 50 million offered a life of 7.1 years and a spread of 22 basis points over Libor.Both tranches ended up priced at tighter spreads than indicated earlier, which is usually a sign of strong investor demand.
The turnover per average spectator at Arsenal's Highbury stadium was GBP 1,812 in 2004-2005, the second highest for Premier League clubs, accounting firm Deloitte said in its annual review of football finance in June. Only Chelsea fans rank higher, with a turnover per average spectator of GBP 2,371.
The Royal Bank of Scotland was Arsenal's lead manager. Earlier this week, the bank and Manchester United both declined to comment on newspaper reports that the football club was also considering securitising ticket sales.
Manchester United fans ranked fourth in the latest Deloitte spending ranking with a turnover per average spectator of GBP 1,734 in 2004-2005.
English clubs have the highest football revenue intake in Europe. Deloitte said in the 2004-2005 season, the English Premier League pulled in the equivalent of EUR 2 billion.
The accounting firm said the big five European leagues – England, France, Germany, Italy and Spain – together generated 54 percent of the EUR 11.6 billion in total revenues for European football clubs.
Arsenal's new Emirates stadium has no track record of ticket sales. But Highbury had 100 percent sell-out rates for all games over the last five seasons, except for League Cup matches, Fitch Ratings said last week.
Average ticket prices at the previous Arsenal stadium also rose by an annual compound rate of 9 percent in the eight seasons to 2004-2005, the rating agency said. Both tranches of the Arsenal bond are guaranteed by bond insurer Ambac Assurance UK Ltd.
The two-part deal, backed by Arsenal ticket sales, will refinance the bank debt associated with the construction of the club's new Emirates Stadium in north London.
Arsenal will move to the stadium this fall after 93 years at Highbury. Ticket sales from the new 60,000-seat stadium will repay the bond. The club's 2006-2007 season tickets range between GBP 885 and GBP 1,825 each.
The deal included a fixed-rate tranche of GBP 210 million, which offered investors a life of 13.5 years and a spread of 52 basis points over United Kingdom government bonds.
A floating rate tranche of GBP 50 million offered a life of 7.1 years and a spread of 22 basis points over Libor.Both tranches ended up priced at tighter spreads than indicated earlier, which is usually a sign of strong investor demand.
The turnover per average spectator at Arsenal's Highbury stadium was GBP 1,812 in 2004-2005, the second highest for Premier League clubs, accounting firm Deloitte said in its annual review of football finance in June. Only Chelsea fans rank higher, with a turnover per average spectator of GBP 2,371.
The Royal Bank of Scotland was Arsenal's lead manager. Earlier this week, the bank and Manchester United both declined to comment on newspaper reports that the football club was also considering securitising ticket sales.
Manchester United fans ranked fourth in the latest Deloitte spending ranking with a turnover per average spectator of GBP 1,734 in 2004-2005.
English clubs have the highest football revenue intake in Europe. Deloitte said in the 2004-2005 season, the English Premier League pulled in the equivalent of EUR 2 billion.
The accounting firm said the big five European leagues – England, France, Germany, Italy and Spain – together generated 54 percent of the EUR 11.6 billion in total revenues for European football clubs.
Arsenal's new Emirates stadium has no track record of ticket sales. But Highbury had 100 percent sell-out rates for all games over the last five seasons, except for League Cup matches, Fitch Ratings said last week.
Average ticket prices at the previous Arsenal stadium also rose by an annual compound rate of 9 percent in the eight seasons to 2004-2005, the rating agency said. Both tranches of the Arsenal bond are guaranteed by bond insurer Ambac Assurance UK Ltd.
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