Valencia CF in-the-box-seat fiscal health

Image: Nou Mestalla, Joanbanjo, CC BY-SA 3.0

The LaLiga team Valencia CF (Spain) have achieved one of the most important milestones in its 105-year history: The complete transformation of its capital structure.

‘valenciacf.com’ stated that over the last few months the club has been immersed in the design and execution of two complex and large-scale financial transactions:

• A long-term corporate facility of €121M; and
• A short-term bridging loan facility of €65M.

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

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

A bridging loan is a short-term loan used to cover a gap in funding when buying or selling property. The loan is typically repaid when the property is sold or when long-term financing is secured.

‘valenciacf.com’ further stated that with the closing of the above two arrangements the Valencia CF have repaid all its existing corporate debts and the restructuring has substantially improved its capital structure providing it with sufficient liquidity, solvency and financial depth for the coming years. These deals also align the club with the largest companies and with the other leading professional football entities allowing it to cover its funding needs, improve its financial health and face its strategic plans with full strength.
 

New Corporate Indebtedness (€121M)

The new corporate debt facility of €121M has been raised in the capital markets, specifically in the United States Private Placement (USPP), made up of prominent professional investors (mainly top-tier insurance companies and pension funds).

The United States Private Placement (USPP) is a confidential transaction where a company issues bonds to a small group of investors. The USPPs are a financing tool that’s a cross between bank financing and bond financing. They’re an alternative to the traditional bank market and offer several benefits.

This transaction is one of the most important in quantitative and qualitative terms ever carried out by a Spanish or European professional football club.

The senior secured debt placement has been arranged under attractive market terms and conditions related to the collateral package, maturity, grace period, weighted average life, and underlying cost. These terms offer significant improvements across the board compared to those previously in place which have been fully canceled. Additionally, the covenants associated with the new financing provide flexibility and autonomy for the club’s future management even permitting the extension of the debt if necessary and gradually reducing the impact of repayment.
 

Bridge Loan (€65M)

Additionally, the Valencia CF have raised €65M in short-term bridge financing with the Goldman Sachs acting directly as the creditor which will allow the club to advance and accelerate its strategic roadmap. The bridge loan facility will be subsequently refinanced by the Nou Mestalla Stadium Project financing which is currently in progress and is expected to be completed in a few months.

Founded in 1869, the Goldman Sachs is a leading global investment banking, securities and investment management firm. Headquartered in New York (US) they maintain offices in all major financial centers around the world.

The 50,000-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 then halted for financial reasons. The design was revised in 2013 with a reduced capacity.

With the above funding secured, the Valencia CF has completely refinanced its previous indebtedness and has obtained the additional flexibility and capacity to meet its working capital needs.

The finalization of new long-term corporate financing agreements highlights the club’s strong endorsement by the prominent investors in the international capital markets reinforcing their credibility and potential for growth.

These transactions put the club in a position to complete the financing for the Nou Mestalla Stadium Project paving the way for construction to recommence in January 2025 and making the Valencia CF´s future plans a reality.

Opined Layhoon Chan, Valencia CF President, “The completion of the debt restructuring exercise marks a milestone in our journey, one that many of us have worked tirelessly to reach. The successful completion of the corporate financing agreement, alongside the bridging loan, has strengthened our financial position. This allows us to confidently move forward with the financing for the Nou Mestalla Stadium Project. The new stadium project represents our commitment to growth, to innovation and to the vision that will be propelling us forward.”

The Bibium Capital (investment banking firm based in Madrid, Spain) (Financial Advisor), the Addleshaw Goddard (an international law firm with a long history in the United Kingdom) (Legal Advisor) and the investment bank Goldman Sachs have helped the Valencia CF accomplish such an important milestone. The Goldman Sachs is also acting as a structuring agent for the upcoming financing of the Nou Mestalla Stadium Project which reaffirms Goldman Sachs’s commitment and confidence in the club. The LaLiga has also actively supported the club throughout the entire process. The DLA Piper (a global law firm based in London, UK) has been the legal advisor of the creditors.

Madrid (Spain)-based the LaLiga, officially known as the LaLiga EA Sports since 2023 due to sponsorship reasons, is the top men’s professional football division of the Spanish football league system. It is contested by 20 teams over a 38-matchday period.

Continue to follow Coliseum for latest updates on venues business news. Coliseum is dedicated towards building the best global community of sports and entertainment venue executives and professionals creating better and more profitable venues.

Become a member of the only Global Sports Venue Alliance and connect with stadiums, arenas and experts from around the world. Apply for membership at coliseum-online.com/alliance and make use of the 365Coliseum Business.

• Tags »
• Capital
• Valencia CF

« Previous News: Bills new home cost ‘north of $2.1 billion’
» Next News: Edgbaston Stadium rejig plushy hotel plans