Wasps retail bond - Wasps Finance plc 6 1/2% 2022
http://www.investegate.co.uk/wasps-finance-plc/rns/launch-of-6-50--secured-bonds-due-2022/201504270700123423L/
Orb listed, £25 to 35m, opens today, secured against stadium.
Club almost went out of business in 2013, bought by an Irish business man, complicated holding structure, Wasps finance is issuer.
Orb listed, £25 to 35m, opens today, secured against stadium.
Club almost went out of business in 2013, bought by an Irish business man, complicated holding structure, Wasps finance is issuer.
Comments
I'm really not sure if 6.5% is sufficient compensation for the risks and my gut feel is that it isn't for me. I prefer to invest in lower yielding but safer issues ideally investment grade. I worry this is a bit of an opportunistic punt by the owners a bit like the Stobbart bond that ultimately didn't go ahead.
I have the feeling this will fly off the shelf, and an early closure will be on the cards
1. When consolidated, ground case scenario is that new entity (Wasps and ACL) might be breakeven. Previously, separate, both have been significantly loss making.
2. Assuming they raise the £35m then they have £2.25m to pay in interest. Where does this come from? Requires some success in combined venture, even if the first 3 coupons are in an escrow account from funds raised.
3. How will it be paid back or refinanced after 7 years?
4. Whole history with Coventry City FC, Ricoh Arena and hedge fund Sisou is a mess, which might come back. Is the repayment of the Coventry Council loan (which was @5%) to distance ACL from any legal repercussions from Sisou claiming C Council loan was illegal?
5. Regarding Wasps, how loyal is fan base? I would not say it is comparable to a football club. The supporters, even if they number a few thousand, have been majorly messed around with stadia moves further and further out of London. It might be doing well now, but there will be an incentive to chase success with signings if they have money and that might not work.
6. From my limited understanding, I am not sure how secure the security is.
a. In the event of a default, Coventry Council can forfeit the head lease if ACL becomes insolvent. ACL would then have the existing lease of 38 years, but it would not necessarily be so easy for the trustee company holding the security to assign the head lease.
b. Value given by Strutt and Parker for arena is based on occupancy by a successful club/s, which probably would not be the case in the event of this coming into play.
Wasps Group CEO David Armstrong certainly talks a good game in the interviews done earlier this month, available to view at:
http://www.wasps.co.uk/waspstv
I was particularly taken with the prospects of a new railway station being in place close to the venue as early as this summer and the intended rebranding of the hotel by the autumn as a Doubletree Hilton. Along with a game against the Samoans to be hosted ahead of the World Cup later this year and new sponsors promised, there would seem to be lots of positive stuff being made to happen!
So far as the bond itself is concerned, I like the fact that there is a guarantee both from the arena and the company itself, with its share in the premiership (and BT bounty), as highlighted by Oliver in his interesting piece.
As to the profitablity of the venture, who knows? Presumably that is not really the point. Provided the management team is up to controlling the costs involved in securing the many and varied revenue streams now promised, the business should support future bond interest payments and eventual refinancing seven years down the road.........which is all bond holders really need worry about!
going with youinvest as usual, and no fee to sunscribe as usual.
I have a Vantage Fund & Share, so I have replied asking if the same applies to such account.
Have you applied free of charge via ISA/SIP/Fund & Share? Perhaps the 50£ fee is for Fund & Share and free for ISA/SIP?
It is very rare that I don't participate in a new issue.
1) Premiership Rugby - Attendance League Position
WASPS Tigers WASPS Tigers
2007/8 137,055 189,266 2 4
2008/9 102,415 209,790 7 1
2009/0 204,775 350,247 5 1
2010/1 184,317 252,195 9 1
2011/2 74,195 247,931 11 2
2012/3 129,644 256,687 8 2
2013/4 153,691 251,377 7 3
2014/5 132,536 222,628 6 4
In 2011/12 the club suffered a bad number of player injuries, which very very nearly put then out of the Premiership.
Interesting to compare them to the Leicester Tigers, which seem to do well, however even a top club does not mean "good financial results"!
http://www.leicestertigers.com/downloads/Leicester_Tigers_Annual_Report_2014.pdf
Turnover 19Million
Operating Profit 482K
Interest Payable = £370K (High borrowings!)
Net Profit after tax = £60K (a loss in 2013)
2) Location of new Club
Far away from London & High Wycombe, and too close to Leicester & Northampton!
Too much local competition for fans
3) No training facilities yet in place, which will require a large investment
4) Building Valuation, very subjective.
If Derek Richardson fails in this enterprise, very doubtful the Arena would fetch any thing close to that it is valued in the books. These buildings cost a lot to run!
5) Director Loans
Derek Richardson has already loaned the business £20.4 million, of which he hopes to get repaid £10m from the bond issue. No small sum!
6) CCC loan is I understand £13.4 million, therefore a large proportion of the bond issue will be paying back two loans.
7) Litigation Case
Could be a costly affair!
Be interesting to see how this new issue is seen by the Professional Institutional Investors
I cannot see anything positive concerning this issue, the risks are not reflected in the coupon rate. Very much like a mini-bond, but trading on ORB
So, I have cancelled my order with Selftrade
If the price does drop significantly then I may well consider purchasing a few at some later date, as I do like the fact that they offer some diversification
007
Wasps v Tigers sells out.
Record-breaking, capacity crowd to watch Aviva Premiership’s new Midlands derby.
Wasps have today announced that their end of season battle against local rivals Leicester Tigers on Saturday 9th May at the Ricoh Arena has sold out. Demand for tickets to the ‘The Stinger’ has seen all 32,600 seats sold for the game as both clubs continue their fight to secure a top six finish for European Champions Cup qualification and push for the Aviva Premiership play-offs.
Go Wasps!
ps Beware that "wasps" can have a nasty sting in their tail!
06 May 2015
NOTICE OF CLOSURE OF RETAIL BOND OFFER PERIOD
"This announcement confirms that the Offer Period will close today at 2pm (London time), such date and time being earlier than the originally scheduled end to the Offer Period ("Offer Period End Point") which was 5pm (London time).
The aggregate nominal amount of the Bonds to be issued will be for no less than £30 million. Wasps will release its announcement confirming the final size of the offer (the "Sizing Announcement") at a time and date shortly after the Offer Period End Point."
So it's closing three hours early?