Wasps 22 Discussion Threads

[grahamg8] 11/10/2021 07:33

Don't forget the potential capital gain from casino/shopping centre/hotel development. This may be the key to unlocking a new finance deal which would allow the bond holders to be repaid.

[aringadingding] 10/10/2021 09:54

grahamg8 - much obliged to you. If I google 'arena coventry stadium' then google shows me a list of scheduled events... which is certainly an encouragingly long list.

I guess if building a set of financial projections then a basic model of it would be to make a financial mock-up of an individual football, rugby, or other event (e.g. conference), in terms of revenue and variable costs, then multiply it by as many as events there are in a year, add sponsorship income and subtract fixed costs to get EBITDA. That would be an interesting exercise but not one I have time for at the moment.

To me the whole backdrop to this particular security, list of things looking positive etc., is just very strong so also for that reason I don't feel a need to do the analysis.

[grahamg8] 09/10/2021 09:29

ringading, ask and you shall receive. Coventry home gates are pretty consistent:
15/9 v Cardiff 16,372
24/9 v Peterborough 20,652
2/10 v Fulham 18,497

Perhaps we should concentrate on how much revenue each rugby and football fan generates from pies and pints? This is the sort of info which is vital to the hospitality business.

[aringadingding] 27/9/2021 17:38

I consider high Wasps physical rugby attendance a nice to have, rather than a must have. It might well pick up over time though. The way they play is just great to watch and this was despite an incredibly long list of absences.

I'd be a lot more interested in the Coventry City Football Club attendance figures when they come out, but in the end two parties using a facility is way better than one.

I mean really the list of positives here has just stacked up so as to be pretty ridiculous in my opinion, and I am very glad to be holding a significant slug of these bonds which are still trading on a great YTM.

Here is another news story for interest about the appointment of John Mitchell. I had missed this event back in July. The article also mentions the new training facility and "The support from the board in making this happen demonstrates the ambition of this club."

[jumpman1] 26/9/2021 15:45

8500 was put down as the official

[dandigirl] 25/9/2021 18:02

Attendance today please?

[grahamg8] 31/8/2021 07:50

fastcat, gambling profits such as poker are indeed tax free. The real anomaly is that gambling profits are tax free, although the logistics would be near impossible. To be fair it would have to cover scratch cards, fruit machines, various lotteries, the Church fete lucky draw, on and on.

My greed and fear are balanced for now with a holding which is as large as I can be comfortable with.

[aringadingding] 30/8/2021 13:42

In the aftermath of GFC many debt/mezz/unitranche funds have filled the gaps left by retreat of lending banks. Some of the staff of said funds are interested in Rugby. If Wasps want new cash as well as to refinance then basic options for the total raise are:

1) All debt at fixed rate (i.e. unitranche)
2) All debt at fixed rate plus zero cost equity or options issuance
3) Combination of senior debt raise (potentially less than £35m) alongside additional and separate mezzanine and/or equity raises

I would expect the first is unlikely given ongoing debt service (in cash) burden implied, but either of the second two seems potentially feasible. £35m, or call it £55m including new funds raised, is a great deal size to be working with: It is large enough for funds to be interested in essentially.

If they want to refinance early in order to progress the investments then I think I recall they can do this without major financial penalties (could check docs). Or they could just wait until May 2022, providing information to the market in a reasonable amount and form in advance of that.

I doubt they are obliged to inform the market of info as to refi funders in advance but you might say it would be reasonable to do so. May 2022 doesn't seem that long for all parties to wait.

[grahamg8] 30/8/2021 09:02

The problem(s) with a new finance deal is that for once the bond holders have the upper hand as they have a mortgage over the principle asset - the ground. There are big plans for developing in other areas such as hotel, casino, and retail. But this means finding a way to sign up the banks who really are only interested when they have first dibs on existing assets. Throw in the extra complexity of the bond repayment being due in May 2022 and Vaughan has a bit of a headache. Not to mention £18.4m skin in the game from Richardson.

The bond price really ought to be a lot higher than it is, with asset security and rental income from Wasps and Coventry, but uncertainty is a killer. I'm sure there will be a solution but it may involve delaying the bond repayment, on what terms we will have to wait and see.

[aringadingding] 25/8/2021 18:40

Hi All,

dandigirl - I see your point

Just revisiting the key points here, and a couple of new ones, as looks like about 24% yield to maturity in May 2022 from here. I am hopeful some new market communication can get this more towards 100p well before then.

- Ground share agreed with Coventry Football Club achieved
- New local sponsor with the right colour branding agreed for the stadium
- Above two points are the key real world factors supporting the on-paper valuation of stadium, forming key security for refinancing lenders
- No relegation this upcoming season and probably not for five years
- DR is heavily invested, has a lot to lose, and probably other assets to use to support financing
- CVC continuing to invest in and look to profit from rugby, wasps have a very good brand
- Many ways to structure the refinancing and they have had a very long time to work it out
- Brand new training facility now open which hopefully the players will like
- The club played some awesome-to-watch rugby last season but were dogged by injury and England call ups. I would expect team spirit to be there this season.

Link for no relegation:

hxxps://www.ruck.co.uk/gallagher-premiership-set-to-halt-relegation-for-next-five-years/#:~:text=Gallagher%20Premiership%20set%20to%20halt%20relegation%20for%20next,to%2013%20teams%20for%20the%20following%20four%20seasons.

Link for new training facility:

hxxps://www.coventrytelegraph.net/sport/exclusive-first-look-inside-wasps-21359689

[dandigirl] 06/8/2021 10:18

These have come too far to fail now IMV.

If Richardson was going to stop supporting WASPS he would have done so months ago when matters were far bleaker than they are today.

[zzaxx99] 05/8/2021 19:18

Looks like someone dumped 40K of this, yesterday, which would account for it

[cc2014] 05/8/2021 18:07

Hard to say

Someone has been selling the riskier retail bonds the last 2 days. Not in any real quantity but they are seeking volume preferene over price preference. I can't see a pattern. Volume is too large to be a retail punter.

Could be as a result of ERO1, down about 50% in 2 days.

Could be just taking some money off the table to invest in equities or lower risk bonds (PFG bonds are strong)

[zzaxx99] 05/8/2021 17:30

Any explanation of why the price of this has dropped over the last few days? Bad news leaking about the refinancing?

[zouppy] 27/5/2021 08:30

Interest is certainly a distribution.

[grahamg8] 26/5/2021 19:14

Interest is not a distribution. The supposed distribution was announced by AJ Bell in error, for which they have apologised, one year before it was due (subject to early repayment options). If you haven't yet had your interest then you need a new broker.

[carmic] 26/5/2021 18:28

FYI
Yippee
Funds arrived in Barclays Smart-investor Account today.

[ozzie_dog] 26/5/2021 08:35

I also received my interest from HL too, on the same day that Bell paid it.

[carmic] 25/5/2021 17:35

Grahamg8:
What makes you say there has not been a distribution? It was due on the 13th, and several have written that there A J Bell accounts were credited.

[grahamg8] 25/5/2021 16:58

Zouppy there hasn't been a distribution. That's why you don't have any money.

[zouppy] 25/5/2021 08:37

Nothing from Barclays. Not a surprise as they are totally useless. Predict it will come through eventually.

[carmic] 23/5/2021 07:17

Morning,
Anyone on here with a Barclays Smart Investor Account.
No distribution paid as of today.