Premiership rugby club London Wasps are seeking to raise as much as £35M ($53M) "directly from its fans and other individual investors with the issue of a retail bond on the London Stock Exchange this week," according to Judith Evans of the FINANCIAL TIMES.
The 148-year-old club "is following in the footsteps of the Jockey Club, which raised almost £25M from a retail bond issue two years ago."
Wasps are offering an annual return of 6.5% "on the seven-year unrated senior bond secured against the 32,600-seat Ricoh Arena in Coventry," which the club bought in '14. It is seeking to raise between £25M ($38M) and £35M from the issue.
Wasps CEO David Armstrong: "I’m sure fans of the club will be interested in the bond but we think it’s attractively structured for retail investors more broadly."
Owned by London-based Irish businessman Derek Richardson, the lossmaking club "is seeking to turn its fortunes round with the renovation of the Ricoh arena." Armstrong said that most of the money raised "would be used for refinancing," including repaying a £14.4M ($22M) loan from Coventry City council made to the former operators of the arena. The remainder "will go towards development of the Ricoh venue." Broker Tilney Bestinvest Research Dir Andrew Ramsbottom said, "Given the amount they want to raise and the high profile of Wasps I think a retail bond was probably the correct thing to do" (FT, 4/26).
