FC Barcelona To Pay €94 Million A Year For Debt To Renew Stadium
(Bloomberg) -- FC Barcelona will pay €94 million ($104 million) a year in servicing the debt related to the revamp of its iconic Spotify Camp Nou stadium, club executives said on Thursday.
The Catalan football club has raised €1.45 billion of debt to fund its Espai Barça project, which includes a redo of the football stadium but also a new Palau Blaugrana arena to play other sports like basketball and handball and other spaces like a hotel and a new museum and store.
Debt repayment will start in 2026, when the works finish, club Chief Financial Officer Manel del Rio said in a presentation Thursday. The bulk of the work on Camp Nou will start in June, and the team will move then to play in the Estadi Olimpic in the city until November 2024, in time to celebrate the club's 125th anniversary in the revamped stadium. That means lower revenue from tickets while the works are ongoing, as the Estadi Olimpic has about 40% less capacity than Camp Nou.
Of the €1.45 billion raised, €375 million came from a bank loan and the rest is from private placements sold to 20 international investors, the club said. Barça has placed eight notes but could place a ninth one for as much as €50 million, said Maribel Melendez, the club's corporate director.
The banks that have provided the loan are Goldman Sachs Group Inc. — which also structured the deal — JPMorgan Chase & Co. and Mitsubishi UFJ Financial Group Inc., Bloomberg reported this month.
The club has negotiated more flexible terms that will allow it to refinance part of the debt when markets improve. It also got a BBB rating from KBRA and the green bond label from Morningstar Sustainalytics, which has allowed it to tap a broader range of investors, said Melendez.
Barça, which had revenue of €100 million in the 2021-22 season, expects to generate an additional €247 million with the new facilities, not including season tickets. It used last season's revenue as a baseline for the terms of the borrowing, so the first €100 million in revenue will go to the club and the rest will go to a securitization fund that will pay constructors and providers as well as financial creditors. The remaining amount will go back to Barça.
The securitization fund structure provides that if financial creditors aren't paid what they are owed, they can only go after amounts in the fund, not club assets, said CFO del Rio.
“The figures are very conservative and the covenants very generous,” said Eduard Romeu, vice president of the club's economic area. “We'll pay an average interest of 5.53%, which is good in the current context but far from what we'd like, hence why we wanted to have more flexibility.”
More details of the financing:
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