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Vikings complete refinance of Wilf’s acquisition debt
Published June 21, 2010
The Minnesota Vikings last week closed a new $135 million loan that refinances the acquisition debt that owner Zygi Wilf incurred to buy the club five years ago, sources said.
Perhaps the most notable element of the deal is the loan’s increased amortization requirement, the sources said, insisted on by the NFL, which regulates team loans. The league has been pushing to reduce team debt and has been more strict in its review of debt deals.
Last year, the league butted heads with the Houston Texans on a $55 million refinancing before the sides agreed to an aggressive amortization schedule and shorter term.
The NFL declined to comment. Vikings CFO Steve Poppen referred questions to team President Mark Wilf, who could not immediately be reached for comment.
The Vikings five years ago borrowed $175 million, so the new loan at $135 million means the team has paid down $40 million of the initial amount. One of the sources said that the new five-year deal requires more of the principal to be paid, or amortized, but declined to say by how much.
The NFL Players Association has expressed concern about the league’s efforts to reduce debt, though the union’s ire was directed at a more formal league policy that was scuttled as a result. The union’s fear is that the more money teams put toward paying off debt, the less money they would make available for payments to players.
The NFLPA’s outside counsel, Jeffrey Kessler, did not reply for comment.
The Vikings are paying 325 interest points over the London Interbank Offered Rate, which last week was trading at 0.54 percent.
The deal is being led by Sumitomo, Citibank and U.S. Bank.
While the Vikings have struggled to secure a new stadium in Minnesota, the sources said the lack of a new venue was not a significant concern in structuring the new deal, given the NFL’s overall strength. Similarly, the potential for a league lockout next year was not a major factor, the sources said.