Spanish LaLiga football club Real Madrid has agreed a deal to raise the necessary funds to complete the redevelopment of Estadio Santiago Bernabéu, and at a lower cost than the previous financing package it took out, according to Global Capital.
The financial news outlet said Real has raised a further €225m (£191.2m/$253.1m) in the US private placement market through an operation led by J.P Morgan and Bank of America, covered primarily by Apollo, Metlife and Northwestern Mutual. Aegon and Macquarie are also said to have participated in a smaller capacity.
Real is said to have negotiated a fixed interest rate of 1.52%, which is significantly less than that of the initial financial package taken out in April 2019. At that time, Real approved a financing package for the redevelopment of the Bernabéu, with J.P Morgan and Bank of America Merrill Lynch leading the €575m loan.
Real will pay off the loan over a 30-year period, with a fixed interest rate of 2.5%. Key Capital Partners acted as the financial advisor and coordinator of the financing project for the club. The financing was structured by J.P Morgan and Bank of America Merrill Lynch with the collaboration of Banco Santander and Société Générale. CaixaBank was the agent in the transaction.
The financing was structured through a loan with three tranches – July 2019, July 2020 and July 2021. A three-year deferral period for the principal of the loan was agreed, which will result in Real Madrid paying an annual debt service of €29.5m, starting on July 30, 2023, and until maturity on July 30, 2049.
The maturity of the new loan is said to have been matched with the 2019 placement, so that it will also expire in 2049.
Real was last month reported to be considering selling its upgraded stadium’s projected “non-sporting activities” such as concerts to a US private equity fund for €400m.
In a report from El Confidencial, Real president Florentino Perez was said to have been planning to sell the rights to activities such as concerts, business trade shows, fashion shows and other events ahead of the completion of the €800m Bernabéu revamp.
El Confidencial said it was not known yet whether the €400m from the deal, brokered by Key Capital, would be paid upfront or over a number of years in instalments. The cash would improve the club’s immediate cash flow and put it in a better position to deploy capital for player acquisition and other new ventures.
Image: Real Madrid