English Premiership Rugby club Wasps have proven the power of sport in raising money by being massively oversubscribed for a financial bond which will raise £35 Million (€48 Million) enabling the club to pay down the debt it built through the purchase of its own stadium in Coventry.
Sport for Business wrote about the bond last month drawing parallels to others of similar nature that had been successful before and highlighting how a similar fund raising vehicle might be used by Leinster Rugby and the RDS in advance of their own redevelopment of facilities in Ballsbridge.
The Wasps bond will now be tradable on the London Stock Exchange and deliver a return to investors of a massive 6.5 per cent over the next seven years.
Wasps completed the purchase of the Ricoh Arena in Coventry last December and are setting new records in attendance for club rugby in England. Smart marketing of the new ground has been undertaken by Dublin based agency Epsilon and the engagement they have built with fans is believed to have played a key role in the success of the bond.
The minimum initial investment was £2,000 and after that it went up in multiples of £100.
The high rate of interest in comparison to other investments is offset by the greater risk but even that is lessened in this case where the bond is secured against the club Stadium which also contains multiple other revenue streams through being rented back to Coventry City football club and with a Casino and Concert venue.
“The funds raised will enable us to restructure our balance sheet and pay down our existing debt, including the loans we acquired with the Ricoh Arena,” said Wasps Managing Director David Armstrong.
“We now have a solid foundation for the long-term future of the club and look forward to the future with confidence.”
