Natty Nou Mestalla transformative investment

Image: Valencia CF

The LaLiga team Valencia CF has successfully secured the full financing for their future home ground – the Nou Mestalla in Valencia, Spain – the most significant non-sporting project in the club’s history.

‘VALENCIA CF’ stated that scheduled to open in 2027 the Nou Mestella will serve as a global benchmark for modern stadium developments. The modern state-of-the-art stadium will drive the Valencia CF’s growth and unlock new long-term sustainable revenue streams that will strengthen the club’s influence and competitiveness for decades to come.

The Valencia CF or simply Valencia is a Spanish professional football club based in Valencia, Spain, which currently plays in LaLiga, the top tier of the Spanish football league system. Valencia was founded in 1919 and has played its home games at the 49,430-seater Mestalla Stadium since its opening in 1923.

The Mestalla Stadium is a football stadium in Valencia, Spain. The stadium is the home of the Valencia CF and has a capacity to hold 49,430 spectators making it the eighth-largest stadium in Spain and the largest in the Valencian Community.

The 70,044-capacity Nou Mestalla is a partially-built football stadium in Valencia, Spain, intended as a replacement for Valencia’s current stadium, the Mestalla. The basic concrete structure of the stadium was built between August 2007 and February 2009 but work was halted thereafter for financial reasons.

‘VALENCIA CF’ further stated that Nou Mestalla is not just a transformative investment for the Valencia CF – it will be a landmark and legacy project for the City and is set to become an iconic symbol for the Valencia CF fans benefiting the City of Valencia, its residents and the visitors.

This new stadium has been designed in line with the world’s leading multifunctional venues and is expected to multiply the revenue currently generated at the old Mestalla facility. The Nou Mestalla will become the epicenter for sport, leisure and entertainment in the City and throughout the wider Valencia Region.

Built to meet FIFA’s highest stadium classification and featuring over 70,000 seats, nearly 10 percent of which will be hospitality seating, it will transform every match or event into a premium experience. A wide range of dining, leisure and event-hosting options will turn the Nou Mestalla into a year-round entertainment venue which will, in turn, significantly increase the economic potential beyond the constraints of the former Mestalla Stadium.

In recent months, the club has worked on a complex, large-scale financial structure totaling €322 million – one of the most significant financial transactions ever completed by a professional football club in Spain and throughout Europe both in terms of scale, the underlying terms and conditions and the overall impact. This project reflects the ambition of the entity and builds on the momentum generated by the corporate refinancing that was completed just eight months ago which strengthened the club’s capital base by consolidating the liabilities and increasing the financial efficiency. This stadium financing further reinforces the Valencia CF’s financial position.
 
The outstanding indebtedness transaction has been structured as follows:

• The issuance of notes with a maturity of 28 years for an amount of €237 million; and
• The subscription of a five-year loan for €85 million. The short-term loan will be repaid with the proceeds from the sale of the land on which the old stadium stands after the new stadium is completed.

 
Both debt tranches have been structured through a project financing scheme which offers a few significant additional advantages for the entity:

• Efficient financing with no refinancing risk and a long term one thus reducing the debt burden so that the asset itself, through its future performance, can comfortably service the agreed debt spreading the impact of repayment very gradually;
• Non-recourse financing for the club so that the new debt will not compromise the financial stability or autonomy of the Valencia CF´s sporting and institutional management;
• Financing with attractive terms and conditions in terms of underlying cost, grace period, repayment schedule, covenants (committed debtor obligations) and associated security package; and
• The new funding will allow the generation of an annual surplus after servicing the scheduled debt which will be automatically released to meet the corporate needs and structural growth of the entity.

 
This transaction received a solid BBB (Investment Grade) credit rating from a recognized credit rating agency with experience evaluating major European stadium developments in recent years.

The BBB ratings denote good prospects for ongoing viability. The financial institution’s fundamentals are adequate such that there is a low risk that it would have to rely on extraordinary support to avoid default.

Commented Kiat Lim, President of Valencia CF, “This marks a historic milestone for the Valencia CF. Securing this landmark financing gives us the green light to deliver the Nou Mestalla – a world-class stadium that will power the club’s growth for generations. It is the clearest expression of our long-term commitment to Valencia and a reflection of the trust and confidence the club now commands in the global financial markets. With this agreement we are building more than a stadium – we are building the future of the Valencia CF.”

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• Nou Mestella
• Valencia CF

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