Club will use cash to pay bondholders 25 million. It leaves open to pay the remaining part of these bonds early.
Benfica will repay part of the debt it had issued in 2018 to retail investors in advance. In total, 25 million euros will be paid out, maturing in 2021. The strategy, which is in line with the group’s debt reduction objective, will generate savings for the club’s accounts.
“The savings generated by the early repayment of 25 million euros in Benfica SAD’s accounts will be close to 1.2 million euros,” explains the club’s official source, in statements to ECO. At stake is a reduction in the value of each of Benfica’s bonds issued in 2018, which pay bondholders a 4% interest rate, every six months until they reach their maturity in 2021.
On January 18th, each bondholder will receive a portion of the amount invested: 2.78 euros for every five euros (value of a bond) invested. The club will offer a premium of 1.25% on the amount repaid in advance (i.e. 0.03475 euros per bond) and will, on the same day, pay the semi-annual interest of 4% (in the amount of 0.10 euros), but will still spend less than if the bonds reached maturity.
After this issue that took place in July in 2018, Benfica placed another 40 million euros in debt in May of this year. Almost 5,000 investors subscribed to the securities issued in that operation, in which a 3.75% interest rate was offered.
The repayment announcement was made when Benfica is also repurchasing shares. The club has launched a Public Acquisition Offer (OPA) on the SAD, in which it intends to buy the securities that are scattered among small investors.
Benfica’s SAD considered the offer made by the club to be “timely”, one of the reasons for this position being that the possibility of SAD no longer being listed on the Lisbon stock exchange is excluded. Thus, they said at the end of November, “it does not prejudice the funding model of Benfica SAD that has been followed in recent years, specifically the use of public offers for subscription of bonds”.