Ottawa Senators announce completion of 135 million financing | MOD warning post #303

Zorf

Apparently I'm entitled?
Jan 4, 2008
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Merge with the Melnyk refuse to sell thread?

But I still would like an explanation for my financially challenged brain to understand
 

Cat Herder

Formerly BigSensFan
Sep 21, 2006
2,599
442
Belle River,On
Is this sort of like re-mortgaging your house?


Refinancing existing debt and adding a little bit more by the looks of it.

If that takes into account ALL of the debt owed then this franchise is not in a bad position financially considering expansion teams are what now $500 million?? (even if it is only the team and not the arena)
 

BonkTastic

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Nov 9, 2010
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Is this sort of like re-mortgaging your house?

It's like when the bank calls about your mortgage payments that you don't have, and you're like "oh crap, I need a loan to pay my loan".

This is the other loan. It means we're possibly paying more interest on the same principal, depending on whether or not this loan fully paid off the other loans.
 
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BonkTastic

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Nov 9, 2010
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A "senior term debt" takes precedence over almost all other debt in the case of any financial trouble.

It also almost guarantees collateral on the part of the person seeking the loan, and almost always involves a lien.

Basically - whoever just loaned Eugene the money gets first dibs on the franchise assets should the Sens fail to pay the loans.

Also: the fact that it's a term debt and not revolving debt means we have to pay it back by a set deadline. Or else.
 

Gil Gunderson

Registered User
May 2, 2007
30,541
15,800
Ottawa, ON
A "senior term debt" takes precedence over almost all other debt in the case of any financial trouble.

It also almost guarantees collateral on the part of the person seeking the loan, and almost always involves a lien.

Basically - whoever just loaned Eugene the money gets first dibs on the franchise assets should the Sens fail to pay the loans.
So what you're saying is that...

If we financially boycott the team...
 

SPF6ty9

Registered User
Feb 22, 2016
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Caca Poopoo Peepee Shire
My guess is the Senators were able to secure more favorable debt, whether it means more favorable interest rates or covenants than what was on the books before. At the same time, the anticipation of future losses in gate revenue via the assumption of less season ticket holders would mean that right now would be the most favorable time to pursue debt financing in the near future. Before the liquidity (cash on hand to pay obligations) position of the team presumably drops and banks would demand a higher spread on the interest payments.

I don't think it's worth speculating anything about new ownership on this one. Probably the most optimistic thing would be to hope that "growth" is code for "Erik Karlsson contract".
 
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BigRig4

Registered User
Feb 22, 2014
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Let's say hypothetically that Eugene was being pressured to sell, could taking out a loan for even more debt be a way to dig his heels in and ensure it's such an unattractive asset that there couldn't possibly be other buyers?
 

BonkTastic

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Nov 9, 2010
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why would that level of debt have caused an issue selling the team?

It's (hypothetically) possible that the old debt that was attached to the team was risky in some way, and the new debt that buys out the old one has more secure terms.

I mean... speaking hypothetically, of course. If that hypothetical scenario were ever based in reality.
 

BonkTastic

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Nov 9, 2010
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Let's say hypothetically that Eugene was being pressured to sell, could taking out a loan for even more debt be a way to dig his heels in and ensure it's such an unattractive asset that there couldn't possibly be other buyers?

At that point, if loans are being made out of spite and "scorched earth" tactics, that's when the league would step in.
 

BigRig4

Registered User
Feb 22, 2014
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It's (hypothetically) possible that the old debt that was attached to the team was risky in some way, and the new debt that buys out the old one has more secure terms.

I mean... speaking hypothetically, of course. If that hypothetical scenario were ever based in reality.

If you can entertain my pipe dream for a minute, is it possible that hypothetically Euge could be securing a more attractive "debt term" as a prerequisite to a sale?
 
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DrakeAndJosh

Intangibles
Jun 19, 2010
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Let's say hypothetically that Eugene was being pressured to sell, could taking out a loan for even more debt be a way to dig his heels in and ensure it's such an unattractive asset that there couldn't possibly be other buyers?
I don't see how making it less attractive to buy is in his favour. It's not like the NHL is planning on stepping in. Definitely could be a desperate attempt to hold on to the team though... Or it's a standard debt refinancing? I don't think anyone can really say for sure right now.
 

JD1

Registered User
Sep 12, 2005
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It could have been what Melnyk needed to hold onto the team. He might have been interested in selling if he wasn't able to secure financing.

do you believe that arranging 130 M in financing on an asset worth well north of 400M and revenue streams guaranteed thru tv deals is difficult to obtain?

that financing was a game of how low the lenders can go....not how high eugene must pay
 
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JD1

Registered User
Sep 12, 2005
15,985
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It's (hypothetically) possible that the old debt that was attached to the team was risky in some way, and the new debt that buys out the old one has more secure terms.

I mean... speaking hypothetically, of course. If that hypothetical scenario were ever based in reality.

I wasn't asking the question because I didn't understand
 

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