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

[JD1]

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.

it's standard debt financing. ... routine....ordinary....common....run of the mill....every day stuff

 

[BonkTastic]

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

Eh, we're having that discussion more as a collective thought exercise than anything else.

 

[Cat Herder]

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

The team is worth 400m+ the arena is in addition .. by the look of the press release it was under both entities

Also it is unclear if the new debt gets rid of all old debt or just a portion .. The Sens could owe millions upon millions more

 

[DrakeAndJosh]

I wonder if this will have any impact on payroll.

 

[JD1]

The team is worth 400m+ the arena is in addition .. by the look of the press release it was under both entities

Also it is unclear if the new debt gets rid of all old debt or just a portion .. The Sens could owe millions upon millions more

sure they could hypothetically.

but the published forbes data on total debt and this finance action are in line with one another

it's also hypothetically possible they don't have more debt

which would you assign a higher probability to?

 

[JD1]

I wonder if this will have any impact on payroll.

I suspect it lowers total operating costs but that is a guess so in the absence of the revenue base shrinking ya it probably would....but it seems like we are going to take a revenue hit

 

[BonkTastic]

Can a mod rename this thread so that it accurately reflects the press release?

Thanks in advance.

 

[Cat Herder]

sure they could hypothetically.

but the published forbes data on total debt and this finance action are in line with one another

it's also hypothetically possible they don't have more debt

which would you assign a higher probability to?

Forgot about the Forbes numbers.. where do they get their data?

 

[Sens of Anarchy]

Can a mod rename this thread so that it accurately reflects the press release?

Thanks in advance.

Just when I was about to post this

 

[Senscore]

Eugene is gonna stuff it all in a briefcase and bail to the Caribbean.

 

[Ouroboros]

This seems like quite a bit of debt. What's a standard debt/value ratio for an NHL team?

 

[Cat Herder]

This seems like quite a bit of debt. What's a standard debt/value ratio for an NHL team?

The previous mentioned Forbes list

The Business Of Hockey

Sens are high at 29% debt to value but there are worse teams out there

 

[Sens of Anarchy]

 

[RAFI BOMB]

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.

It also mentions that it is syndicated, which means that a group of lenders are working together to provide funds to a single borrower. In some ways this is a form of risk mitigation for the lenders. There is more of them so each has a smaller portion of capital invested. Also as you mentioned being senior debt means that they take priority in liquidity events.

Without knowing much about financing of sports organizations it is difficult to tell whether this is standard financing or whether Melnyk is higher risk and these institutions are attempting to mitigate the risk exposure.

 

[Micklebot]

So, this seems like a non-story to me.

1. We already knew the team had about this much debt.
2. We already knew the team was doing a financial road show to secure new financing.

There is one aspect that potentially concerns me. The league has a secured line of credit available to all teams using the leagues broadcast deal to get favorable rates, and each team can apparently borrow up to ~100 mil from that. That line of credit is apparently at 2%, secured on the 5 billion dollar tv deal; it's hard to imagine Melnyk would have gotten a better rate. So, why isn't he using that, or is he using that?

The other curious thing to me, why do we make an announcement about this? Do other teams announce financing deals? What's the end game here?

Edit: Found another example of a team announcing its financing, so apparently it does happen. Nsh did it back in 2011.

 

[Sens of Anarchy]

According to CTV they received excellent terms.

 

[Micklebot]

According to CTV they received excellent terms.

Better terms. Better than what? The rumored terms back in 2013-2015 were pretty much predatory

The Ottawa Citizen reported Melnyk reworked the Senators' debt in April, 2013, by lining up $150-million of new financing from two U.S. specialty funds. These loans typically come at high interest rates, often at more than 10 per cent.

Don't get me wrong, it's good news that the terms are better. There's no downside to this. But, I'm still left to wonder why not use the line of credit which has now apparently been fixed to work for Canadian teams (perhaps in fixing it, the rate is no longer as good, idk)

 

[Nac Mac Feegle]

So, this seems like a non-story to me.

1. We already knew the team had about this much debt.
2. We already knew the team was doing a financial road show to secure new financing.

There is one aspect that potentially concerns me. The league has a secured line of credit available to all teams using the leagues broadcast deal to get favorable rates, and each team can apparently borrow up to ~100 mil from that. That line of credit is apparently at 2%, secured on the 5 billion dollar tv deal; it's hard to imagine Melnyk would have gotten a better rate. So, why isn't he using that, or is he using that?

The other curious thing to me, why do we make an announcement about this? Do other teams announce financing deals? What's the end game here?

Edit: Found another example of a team announcing its financing, so apparently it does happen. Nsh did it back in 2011.

Wasn't there something less than a year ago, that Melynk maxed out that NHL line of credit?

 

[Tnuoc Alucard]

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?

Who would have hypothetically been pressuring EM to Sell his franchise?

Why would EM want to ensure the Franchise is an unattractive asset?

 

[Wondercarrot]

I would imagine $100 million of it through the NHL low interest loan program right? Apparently that’s what he had before.
Those terms will be more favourable than anything melnyk would get.

 

[Tnuoc Alucard]

Can a mod rename this thread so that it accurately reflects the press release?

Thanks in advance.

The Title of the linked Press release is "Ottawa Senators announce completion of $135 Million financing" ......the same as the thread?

Was it changed, and from what?

 

[Qward]

ooooooooohhh so this is why Burrows had to be bought out. The signing of the deal depended on it.

 

[Tnuoc Alucard]

While there has been no shortage of talk the franchise was up for sale, this decision could serve notice that Melnyk is committed to being part of the long-term future of the organization which he has repeatedly said.
Ottawa Sun
Ottawa Senators complete $135 million refinancing

 

[mianjo]

Now they can Pay Karlsson what he wants.

 

[armani]

Now you got no excuse Melnyk, by this news release you are telling us that you will invest on a better on-ice product, and re-sign #65 to 8 years to have him lead the core and the young guns rising.

Pony up you pony owning bitch!