After months of negotiations, the Espai Barça financing agreement is practically a reality. After obtaining the approval of the board of directors at the meeting held last Thursday, the economic managers of FC Barcelona met on Monday night with the representatives of Goldman Sachs and the JP Morgan fund to close the structure of the agreement of financing, which will ultimately be 1,450 million euros that will have to be returned within 25 years with interest. This structure, flexible in time and in the amounts that the different investors will contribute, includes control mechanisms in case UEFA acts and decides to leave the Blaugrana club out of Europe after its internal investigation started by the outbreak of the Negreira case . The officiality of the agreement is pending several legal fringes and the planning of a communication strategy that FC Barcelona must agree with the investors.
Not all investors will contribute the same amount or enter into the agreement at the same time. The structure of the agreement is also flexible for Barcelona and foresees repayment periods ranging from 5 to 25 years. The interest rate of the operation will have an average of 5.5 percent, although the club insists on being able to refinance it from the fifth year with the aim that this rate can be lowered and renegotiated once the new stadium is up and running and the club can start paying back the borrowed money.
The financing operation will be closed in stages. As reported by this newspaper, in the first installment the club will have to allocate around 200 million to return the bridge credit of 180 million advanced by Goldman Sachs, in April 2022. The club allocated this amount for a long-term first reform of Camp Nou.
Investors have set their conditions. There will be a committee of representatives that will thoroughly monitor the works of the Spotify Camp Nou and the club has committed to creating an alternative balance sheet to the official one to better control the accounts. In addition, as this newspaper explained, the financial institutions sent through Goldman Sachs and JP Morgan more than twenty questions to Laporta to find out how he planned to deal with the potential negative consequences of the Negreira case. Concerns that grew once UEFA publicly announced that it was opening an investigation into the case. After receiving the president’s answers, the financial institutions wanted to establish an equivalent income plan in case Barça ended up being kicked out of the Champions League. As an alternative, Barcelona would make a tour of the first team to several countries and other friendlies during the year with which it could enter a similar amount. Despite the fact that this campaign has not passed the first phase of the Champions League, Barcelona paid 70 million euros for this competition and half a million more for their passage through the Europa League.
The governing body of European football must determine whether, after starting the investigation, open the corresponding file.
At Monday’s meeting, the representatives of Barcelona also informed the representatives of Goldman Sachs and JP Morgan that they have obtained the BBB rating, which indicates that their ability to meet their financial obligations is adequate.
However, it should be remembered that issuers in this credit quality scale are more vulnerable to adverse events compared to those in any of the nine categories above, with the triple AAA scale as the maximum rating that can be achieved
With the aim of preserving negotiations with investors, FC Barcelona requested privacy from the Kroll agency, which until mid-March issued a note with its assessment of the new debt structure designed by the entity to achieve the financing and its corresponding qualification. In the two previous reports, Kroll had moved from rating it BBB to triple B.
This situation is what has caused several discrepancies to have existed during the negotiation process with the investors that had to be closed at the end of March. The delicate economic situation of Barça and the instability of the financial market caused some managers to consider the possibility of postponing the project until the outlook for the banking and investment sector improves. This is what they expressed at the last meeting of the board that was held last Thursday and that lasted for more than 8 hours. But in the end it was played to achieve the set goal of funding.
In fact, while the meeting was being held, the board agreed and communicated to the Real Spanish Football Federation (RFEF) that its first team will play its home games next season at the LluÃs Companys Olympic Stadium in Montjuïc, information that the federation must notify, at the same time, to UEFA.
Meanwhile, works have already begun at the Montjuïc stadium and its surroundings to adapt the facility to FC Barcelona’s needs.
