Wasps 22 Discussion Threads

[mmoule] 03/8/2022 15:43

1bondinvestor - I agree. Almost nothing management has said has been true. The last Wasps statement said they 'will formally launch a consent solicitation process in August.' Anyone believe that is going to happen?

The longer things get left the more money will have been spent.

[1bondinvestor] 03/8/2022 15:29

Even if the bonds are relisted the quotation will be nominal with a wide spread. I am doubtful if the market could accommodate any sizeable transactions in view of the amount of the issue. My own investment is through Hargreaves Lansdown. Information is usually relayed to me weeks or in some cases months after a specific event or announcement. Fortunately, I am in direct contact with Lawrence but there must be many bondholders who are unaware of the up to date situation. I posted on this site my reservations about the purported refinance when first announced. All that has been accomplished following a second misleading statement is a loss of confidence in the issuer. How can we believe anything they say? I don't disagree that we should proceed with caution at present but if the situation is no nearer a solution by the end of the year of if the next 6 monthly interest payment is missed I would be strongly in favour of a more robust approach.

[l2s] 03/8/2022 12:53

Thank you Thincat1 for the comprehensive update. Now is the time for cool heads to prevail. I would still maintain that no-one is deliberately trying to deprive me of my 'hard-earned' but these are difficult times. I am happy to await developments without trying to force a situation which could be to everyone's disadvantage. Dandigirl, PUSB , Thincat1 - I think we are all on the same page!

[dandigirl] 03/8/2022 12:42

Must say this Trustee is by far the most helpful I have seen.

Kudos to Lawrence.

[pjrh] 03/8/2022 12:27

I too had a long chat with Laurence Griffiths yesterday who stated that for a meeting to be convened holders representing 10% of nominal capital had to request this or for an acceleration notice to be issued 25% had to request this.
My concern is that I bet the vast majority of bondholders won't even know it is in default as all holdings are in the broker's nominee name or Euroclear and Brokers have a bad habit of not passing the information on.
I am surprised that the media haven't latched on to this default as the first retail bond that may fail, as a number of financial commentators have recommended retail bonds in the past.

i am in favour of some sort of meeting that outlines in fairly simple terms what our options are and the assets that we have charge over. The longer their delaying tactic goes on the more money the board can waste. I feel pressure should be put on them sooner rather than later.

Also if the bonds are relisted and they trade at 30/40p for example could the Wasps finance company buy these in and use their holdings to vote through proposals that don't suit the majority of other holders?

[dandigirl] 03/8/2022 10:49

PUSB: Totally agree.

[pusb] 03/8/2022 10:18

Dandigirl- the thing is, there is unlikely to be a short term solution. Bond holders will either agree an extension ( with potentially no better financial position for Wasps at the end of it) or they will not agree at which point it is likely that the sale of the stadium will be necessary. Either way will be many months: indeed the latter may be quicker than the former.

[dandigirl] 03/8/2022 09:49

The Times report while being interesting is unlikely to help short term.

It takes months for ownership of a club like Coventry to change hands.

Everyone wants to have a say.

Add on a layer of negotiations regarding the stadium and it would take forever.

In the longer term, maybe.

Richardson just has to press on.

[pusb] 03/8/2022 09:26

Barondene - the only thread I could find on the football forum post dates the article. It would be disappointing if such a prestigious newspaper did no research for such an article. The fact there has been no announcement means nothing. For example, there was no announcement about a pending sale of the arena in 2014 to Wasps until after the football club had returned and the sale completed. If there is any truth to the article it could be to bondholders benefit. I posted the article because fastcat99 had asked for it.

Sisu have kong said that the time to sell was when at the top of the cycle, which is pretty close to where they are now without further investment. Ultimately, is it true? I don’t know, but it would not be a surprise if it were.

[notabondholder] 03/8/2022 07:53

Ok go and cash out then, You can’t. Get the trustee to do something you can’t get enough of you to agree.

[barondene] 02/8/2022 22:18

@PUSB The report in the Times is fake. They have picked up a post on the football forum and misrepresented the position
The Club is not up for sale and no announcement has been made to that effect

Sounds more like WASPS PR machine trying to deflect their situation

[ozzie_dog] 02/8/2022 18:27

@bondholder I held back from saying that you do not seem to understand investment, despite thinking exactly that (but I see someone else has already said that, and I can understand why they said it).

We couldn't possibly have lost all of our money (as you stated) because we only invested 1.2% of our money in the wasp bond. And it is far from over yet for Wasps, as dandigirl stated sports clubs have a tendency to recover from poor situations, which was factored into my original decision to invest. This is far from over yet.

[dandigirl] 02/8/2022 17:38

1357 etc: Agree your first point. It is just the latest silly post on this topic.

.. but not the second. Sport has lots of examples of clubs arising from the ashes.

Jonny: You will not be dictating terms but able to take or leave only what is on offer with consequences both ways.

Sad to say, Richardson made some bad choices. An extension could have been addressed weeks ago. Instead we have what is pretty much a financial mess for all and which will likely be more costly.

[135791113] 02/8/2022 17:22

@NotABondHolder - Of course bondholders haven't "lost all your money". What complete nonsense. While the assets which the bond is secured against exist there is value. The value of those assets is questionable, and will only ever really be calculated if they have to be sold, but £35m is not a unsurmountable amount of money to be recovered.

If you honestly believe bondholders have lost £35m your understanding of finance is clearly negligible. Furthermore, from a Wasps point of view, a total default is the last thing they want. It would just about end the rugby club and everything they have built.

[notabondholder] 02/8/2022 16:40

So the way I see it you have all lost your money and there is nothing you can do because the trustee isn’t going to do anything unless you get 75% of you to agree to do something and put more money in to cover trustees costs, good luck with that.

[jonnyhatesrap] 02/8/2022 16:17

So Wasps are essentially wanting bondholders to consent to extending the terms of the bonds to give them more time to refinance. This should only be sensible for bondholders if (1) the interest rate on the bonds is increased from 6.5% to reflect the financial condition and (2) the extension is linited to no more than 1 year and (3) bonds are relister to allow trading to recommence. Failing which the Trustee should use its own discretion to enforce - it is already protected by the security over the stadium and it is not going to get indemnities from thousands of individuals.

[thincat1] 02/8/2022 14:45

I've just had this message from Laurence Griffiths:

"Please see attached a notice the Trustee has sent via the clearing systems today. As you are aware, we have agreed to send out copies of the Trustee’s notices to bondholders that have confirmed their proof of holding as well as via the clearing systems. However, as stated in the notice, given that the Issuer has indicated its intention to launch a consent solicitation process in August, you are recommended to confirm arrangements with any broker or custodian (or similar) to ensure that you have taken any required steps to ensure you will receive and (should you wish to do so) be able to respond to any corporate action event linked to the consent solicitation process.

As an administrative point, could I please request that [e-mail] and [e-mail] are copied in on all email communications just to ensure coverage on our side? We will come back on your other points separately later this afternoon.

Many thanks

Laurence".

The attached notice reads:

"We, U.S. Bank Trustees Limited, in our capacity as trustee in respect of the Bonds (the “Trustee”) wish to draw Bondholders’ attention to:

(i) the notice delivered by the Issuer dated 29 July 2022 whereby the Issuer updated the Bondholders that it will not complete the refinancing and redemption of the Bonds within the previously proposed timeframe, that it will seek an extension of the Bonds and that it will formally launch a consent solicitation process in August. The Notice is available at the following link:

(ii) the notice of event of default delivered by the Trustee dated 1 June 2022 notifying Bondholders that an Event of Default has occurred (the “1 June Notice”).
Notwithstanding the Issuer’s notice of 29 July 2022, the Event of Default detailed in the1 June Notice is continuing.

With respect to the Issuer’s notice of 29 July 2022, the Issuer makes reference to taking steps to relist and re-admit the Bonds to the London Stock Exchange. The Trustee has notified the Issuer of the breach of the covenant at Clause 7.9 (Listing and Trading) of the Trust Deed for the Issuer failing to maintain its listing of the Bonds. In accordance with Condition 9(b) (Breach of Other Obligations) the Trustee has requested such breach to be remedied and the Trustee is of the opinion that such breach has not been remedied within 30 days of such notice. The Trustee has certified that in its opinion such event is materially prejudicial to the interests of the Bondholders meaning that another
Event of Default has occurred and is continuing.

We remind Bondholders that, at the current time, the Trustee does not intend to take any steps to enforce the terms of the Transaction Documents, the Bonds and the Coupons unless so directed and indemnified and/or secured and/or pre-funded to its satisfaction. Bondholders should in the first instance refer to the Trustee’s notice dated 1 June 2022 for further information in relation to the provisions relating to such directions and any associated indemnification and/or security and/or prefunding.

Bondholders should also note that the Conditions and the Trust Deed provide the applicable mechanics, requirements, and thresholds in relation to, amongst other things, Bondholder consent to amendments to the Conditions and convening meetings of Bondholders.

Given that the Issuer has indicated its intention to launch a consent solicitation process in August, you are recommended to confirm arrangements with any broker or custodian (or similar) to ensure that you have taken any required steps to ensure you will receive and (should you wish to do so) be able to respond to any corporate action event linked to the consent solicitation process.

Contacts: Bondholders who have queries concerning anything mentioned in this notice may contact the Trustee along with relevant proof of their holding at:
Address: U.S. Bank Trustees Limited Fifth Floor 125 Old Broad Street London EC2N 1AR
Reference: Corporate Trust re Wasps Finance PLC
E-mail: [e-mail]"

[pusb] 02/8/2022 14:20

I don’t read this as looking for a 3rd party to build a position in the bonds at all. I read it as a 3rd party either

A) potentially offering Wasps an out by buying the head lease for a price which would enable Wasps to pay out to bondholders

B) being in a position to buy the head lease when / if Wasps are unable to refinance, terminally default and the bondholders seek to enforce the guarantees through the mortgages referred to in the prospectus.

[fastcat99] 02/8/2022 13:50

Thanks - there seems to be an elementary journo's error ('next month' in penultimate para surely still means THIS month - but it would be worth checking!)

More important, this kite flying / shroud waving should probably be taken with a big pinch of salt. Read it VERY carefully, to see who is actually on the record as saying what, when.

Then think through the next sequence of events - they must all start with publication of a Consent Solicitation by WASPS Finance to Bondholders, for EGM to approve;
- according to the Trustee's sequencing, any (extremely hypothetical) 3rd Party could not BEGIN to build a position in Wasps Bonds until after that had been completed.

So who is trying NOW to put the frighteners on whom, to what end ?

[pusb] 02/8/2022 13:05

The hedge fund owner of Coventry City FC is open to offers from a buyer with the clout to capitalise on financial difficulties at Wasps, the rugby team that owns the football club’s shared stadium.
Wasps, who play in England’s top rugby division, are in default on a £35 million bond, having failed to repay retail investors who helped to finance the purchase of the Coventry Building Society Arena in 2015.
The bond was suspended from the London Stock Exchange in May when repayment had been due. Last Friday Wasps admitted that it also would miss a new repayment deadline of August 12.
The Times understands that Sisu, a Mayfair-based hedge fund, is considering a sale of Coventry City, believing that Wasps’ distress may present an opportunity for a third party to make an offer for the club and, at the same time, bid to acquire the lease for the arena. A senior source said Sisu was “open for business”. Sisu itself is unlikely to make an offer for the stadium because of its troubled relationship with Coventry city council, which owns the freehold.
A spokeswoman for Wasps declined to comment on the idea, but said the club was “committed to its long-term future” at the stadium.
Sisu, which is led by Joy Seppala, 60, an American investor, bought Coventry City in 2007. Wasps, having relocated to Coventry from west London in 2014, bought the lease for the stadium amid a dispute between Sisu and the council.
The rugby club’s bond, which has a 6.5 per cent coupon, was suspended in May on the last day of trading before it was supposed to reach its maturity date. Wasps had said that it was seeking to refinance with HSBC and in June it extended the proposed redemption date for the bonds to August 12.
On Friday, Wasps Finance, the issuer of the bond, said it had not been able to “agree final terms for refinancing” and so would be unable to redeem the bonds next month. Wasps said that in addition to talks with HSBC, it was “pursuing different refinancing options”.
Sisu’s ownership of Coventry City, known as the Sky Blues, has involved an often-fractious relationship with both the council and the team’s fans. However, the team has been enjoying progress on the pitch recently, rising from League Two to the top half of the Championship last season.
Sisu is thought to be open to the football club changing hands or a part-sale of equity if a third party also manages to acquire the lease for the stadium, which was built by the council in 2005. The source, speaking on condition of anonymity, said the natural next step for Coventry City was promotion to the Premier League, but that would require “serious investment”, possibly from a third party. “This is a real opportunity for growing the club into its potential,” the source said.
Wasps said that next month it would ask bondholders to agree a further extension to the redemption deadline, which would remove the bond’s default status, and that it was seeking to have it reinstated on London Stock Exchange. Bondholders will continue to receive interest.
A spokesman for Sisu declined to comment

[ozzie_dog] 02/8/2022 12:42

Thanks dandigirl, I thought that might have been what was the article was about.

[fastcat99] 02/8/2022 12:41

Could someone please post the FULL text of today's Times article ASAP? I tried to open a subscription just to get it, but google/Murdoch/Apple have screwed it up !! Thanks

[ozzie_dog] 02/8/2022 12:40

@Notabondholder Over the years we (my wife and I) have invested in quite a few 'risky' investments, not just one, because you do not want 'all your eggs in one basket', so when one particular investment (e.g. the Wasps bond) doesn't perform as you hoped, if overall you have gained, then that is 'the good' that you are missing. Of course I would have preferred it to have gone smoothly, but it hasn't. But our wealth is at least £5m ahead of where we would have been if we had only invested in much safer assets. Do you not accept that it is much better to have an extra £5m in your retirement pot? We only have that because of our investment choices, which involved taking on risk. If you take on risk it isn't going to be fruitful 100% of the time, but it doesn't have to be to come out in front.