Column: Clubs across Europe face tough meetings with their lenders – higher interest rates are exactly what clubs wanted to avoid after Covid
Alamy
In the current economic conditions, funders are risk adverse and risk margins are increasing.
Clubs raising debt face additional business issues which normal businesses may not have.
Why it matters: Attracting long term debt mitigates some refinancing risk issues but is not easy to secure.
The perspective: Several clubs around Europe are facing refinancing of their debt within the next 12-24 months. What looked like “a walk in the park” earlier this year might be a nerve wrecking exercise.
18 October 2022 - 1:00 PM
All clubs across Europe will have experienced a significant increase in their cost of capital when financing or refinancing in the debt markets. This is generally due to the ongoing base rate increases (1) and volatile market conditions.
The majority of clubs rely on short term debt (up to 5 years) and, like general corporates across Europe, when they come to raise new debt or refinancing existing debt will experience a significant higher cost of capital. Consequently, th
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