NEWS
Wednesday January 3 2018
Milan could issue bond

Milan could reportedly emulate city rivals Inter in releasing a bond to pay their debt to Elliott Management.

The Rossoneri are looking to refinance their loan from the U.S hedge fund, and had approached BgB Weston to find investors willing to make the investment.

There was an offer on the table from Highbridge, but it was reported last month that it was ’50-50’ if that would get through due diligence.

Yesterday it was reported that the Diavolo had decided themselves to halt talks, and Il Sole 24 Ore has analysed the situation today.

It’s thought Highbridge were willing to refinance the club’s debt of around €120m, but not the €180m taken on by the holding company Rossoneri Sport Investment.

There are doubts about owner Yonghong Li’s finances and the fund didn’t want to back the enigmatic Chinese businessman.

In addition, around €50m was needed to pay interest on the Elliott loan, as well as another €50m to help with the running costs of the club.

That would have seen the cost of the loan rise to at least €400m, even if Highbridge had relented and repaid Li’s debt.

Il Sole 24 Ore states that Milan CEO Marco Fassone will now travel to China next week to analyse the situation with the club’s President and the executive director, Han Li, but the Highbridge option has been taken off the table.

The two most likely solutions are finding another speculative American fund, or issuing a bond as Inter did.

The Nerazzurri issued bonds to refinance debts last month, which will yield 4.875 per cent in 2022.

They received around double the required subscriptions.