(Bloomberg) -- Real Madrid FC is set to borrow about €370 million ($390 million) from institutional investors to help finance the renovation of its iconic Santiago Bernabeu stadium, according to two people familiar with the matter.
Europe's most successful football club is raising the money through a private debt-issuance, which will be paid back with funds from ticket revenues in what is called a waterfall payment structure, said the people, who asked not to be identified as the discussions are private.
Private debt markets, which offer more privacy than public debt sales and are less prone to swings in sentiment, have become a useful source of funding for Europe's top clubs in recent years.
Madrid's rival FC Barcelona borrowed €1.5 billion from private debt investors to finance its own stadium revamp, while Chelsea FC raised £500 million ($604 million) in subordinated debt from US direct-lending giant Ares Management Corp.
A representative for Read Madrid didn't immediately respond to phone calls and emails seeking comment.
Real Madrid, which has won Europe's top club competition a record 14 times, has raised debt several times since 2019 to pay for its stadium. The works, which are largely complete, include increasing the seat capacity as well as the installation of a removable pitch that will allow the club to shift the grass surface into storage while it hosts other revenue-generating events, such as concerts or tennis matches.
Because Real Madrid is owned by the club's members, the borrowing must be approved by them in a general assembly. The club may decide the date of such a meeting as soon as later today.
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