MU Finance plc, a subsidiary of Manchester United plc [NYSE: MANU], has today issued a notice of redemption for all £177.78m of its outstanding sterling 8.75% bonds and $22.09m principal of its US dollar 8.375% bonds.
Funding for this bond redemption is to be provided by a committed new facility provided to MU Finance plc by Bank of America, N. A.
The interest rate payable under the new facility will be a variable rate calculated as Libor plus an applicable margin of between 1.5% and 2.75% per annum. The redemption will occur on June 24, 2013. If calculated today, we estimate that the starting rate of interest would be approximately 2.78%, resulting in an interest reduction of around £10m per year.