Last updated : 22 May 2007 By editor

Reuters report that the Glazers are looking to either take out a bond on future ticket sales, which worked so well for Leeds and City, or another securitisation of the debt.

'Closely watched plans by British soccer club Manchester United to borrow against future ticket sales could be scrapped in favour of more flexible debt options, a person familiar with the situation said on Monday.

'The top club in England's Premier League has appointed Royal Bank of Scotland and Deutsche Bank to start working on a securitization, or the wrapping of its 663 million pounds ($1.31 billion) of debt into a bond, using future ticket sales as collateral.

'But now, Manchester United and the controlling Glazer family, is also considering a quick leveraged recapitalization, similar to the one it carried out last August, under which the most expensive debt tranches would be eliminated, increasing senior debt, the source said.

'The change in capital structure is aimed at reducing the hefty interest costs that came with the loans that financed Malcolm Glazer's 790-million pound acquisition in 2005.

'Manchester United's 150 million pound second-lien debt tranche costs as much as 500 basis points above the London Interbank Offered Rate (Libor), while the 375 million pounds of senior debt cost between 212.5 and 275 basis points above Libor.

'Manchester United also has 138 million pounds of PIK notes, which charge a stinging 14.25 percent fixed interest rate. This tranche was reduced last year from 338 million pounds. A decision may be taken soon, although talks between the club and its financial advisers about a securitization are proceeding, the source said. Manchester United declined to comment.'