Banks are on the run in supporting CVC €2bn investment into LaLiga with a high-yield bond. The sole underwriter on the initial for backing the deal is Goldman Sachs. The smaller percentage of the underwriters are Deutsche Bank and Credit Suisse. It seems like the fund is to come in at under €1bn. It would be in the fixed-rate format. The small floating-rate portion is also under consideration.
According to the sources, the bond was under an unusual structure. The scheme would be for investors to lend to a holding company. On the other hand, the security of the deal would be by a contract stream from other broadcasting rights and other revenues. The expectation of the deal would not be driven by CLO demand. Thus, the lead would be partly plumping for a fixed-rate bond.
Inter Milan and AS Roma have used the same structured deal. The issued bonds are from special purpose vehicles that ring-fenced each club’s media, broadcast, and sponsorship business. They play as separate entities from the football point of view. Inter for instance paid its debut high-yield bond in 2017. Inter Media was the issuer. The structure was a bankruptcy-remote SPV that has indirect ownership with the club.
Roma copied the structure in August 2019 when it priced its debut high-yield offering. The sole bookrunner of Inter’s bond was Goldman Sachs. Together with JP Morgan, they became the global coordinator on the Roma deal. LaLiga on the other hand expects a simpler structure than Inter Milan and Roma deals. It is likely to be easier too as investors won’t take risk from any club. Based on the expectation, the bond would be in the market over the next four or six weeks.
The bond debut is together with at least five other financings. It includes the buyout deal for UK supermarket Morrisons. CVC and LaLiga signed a deal in December 2021 to invest €2bn into the Spanish football league. 37 out of 42 clubs voted in favor of the Boost LaLiga agreement.