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SBJ/September 13 - 19, 2004/Finance
Citigroup lends Nashville Predators $37M
Published September 13, 2004
Citigroup lent the Nashville Predators $37 million, closing the deal just weeks before Wednesday’s expiration of the NHL’s collective-bargaining agreement.
The deal refinances roughly the same amount of debt the team had borrowed from BankAmerica as part of the acquisition of the franchise. Citigroup was a smaller lender in that deal, and chose to step up to lead this debt deal.
“Even though a lockout is coming, we were pretty comfortable we could structure a deal,” said Gordon St. Denis, founder of Triton Sports, the boutique sports finance agency the Predators hired last December to find a lender.
The loan is secured by the franchise, but does not include reserve funds to cover operating losses and debt payments in the event of a lockout, which is widely anticipated. Instead, those payments would be covered by the $10 million line of credit each NHL team was required to obtain in anticipation of a labor disturbance.
Ed Lang, the team’s chief financial officer, said the loan structuring began many months ago. So while the loan closed right up against the CBA expiration date, the banks had been working on it since May.
Besides Citigroup, HSBC, CIT Group and First Tennessee lent part of the money. Citigroup declined to comment. Lang and St. Denis declined to comment on the interest rate. The loan matures in three years.
The team originally thought it had a loan deal set with GE Capital in the spring. But in the end, GE and the team could not reach agreement.