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QPR Bond - 5% / 8% / 13%


Frank Hovis
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Frank Hovis

I am not advising anyone to invest in this but I thought it something interesting that might pop up in other contexts; not necessarily football.

When other sources of finance are expensive then go to your customers and invite them to invest.

That 5% for outsiders becomes a genuine 8% for customers as a saving on your season ticket and then you have that possible additional 25% if they're promoted within the five year life of the bond; and they're looking good for the play offs this year.

As I'm not a customer that wouldn't work for me but it would if, say, Lidl was issuing a bond and gave that 3% in genuine discounts.

 

 

The bond will be available through Tifosy Capital and Advisory (www.tifosy.com/qpr), the leading sports advisory and capital solutions firm. Investors can pre-register from Thursday 30th September 2021 for priority access to invest, with the offer due to close no later than November 12th. The bond, issued by QPR Holdings Ltd, will pay 5% gross interest annually, with an additional 3% gross in club credit redeemable on tickets and merchandise, and investors will be paid a one-off 25% bonus if the club is promoted to the Premier League during the lifetime of the five-year bond.

https://www.qpr.co.uk/news/club-news/qpr-x-tifosy-300921/

 

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Yadda yadda yadda

Interesting that their cost of capital is greater than 8%.

I could borrow at much lower rates than that. Not £20m, though. Good investment for QPR fans. I'd be a bit concerned they can't finance their new training ground more cheaply though.

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They are obviously there because nobody else will lend to them at lower.

Also they have incredibly rich backers - Mittal's son's wedding cost three times as much as this - £20m is nothing to him.

The danger is that the club could end up being refinanced, still exists but the loan holders are stuffed. Chilango did a similar offer where you got a free burrito a week and 8% for a £10k investment - anyone who invested in that was wiped out.

If you go on Wisealpha (which basically divvys up bond offerings for retail investors) this is comparable to one of their 'special situation' ones as the company is basically loss-making. Those ones are at 10%+, so basically better than this.

 

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Democorruptcy

The Jockey Club started these sport bonds in 2013 4.75% interest and 3% rewards. 96% renewed that one. The land they own must be worth a fortune, if they had any financial problems they could sell a racecourse to builders.

 

 

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