Outlook: Bernie bond revs up, now a race to float

VROOM, VROOM and it's away at last. The Bernie bond finally got off the starting grid yesterday just in time to allow the sponsors to collect their fees, sit back and enjoy this weekend's Spanish Grand Prix.

Bernie Ecclestone's Formula One bond is not, of course, quite the souped- up model originally billed. It has spent so much time doing practise laps that there was a real danger the issue would run out of petrol before it reached the starting line.

As it is, the offering which finally hit the Eurobond market yesterday, nine months after its first unveiling, should more accurately be described as Bernie's incredible shrinking bond. It started out life as a $3bn flotation and was then scaled back to a $2bn bond issue. Now the size of the issue has been whittled down again to $1.4bn. But not the coupon which ratchets up at the speed of Michael Schumacher leaving the grid.

The term of the bond has also shrunk from 20 years to 11, presumably to help the ratings agencies swallow any qualms they may have had about the security of the television revenues which underpin the bond.

As is usual with Formula One's finances, much of the detail remains opaque. Formula One is coy about who exactly has subscribed for the offer beyond the joint lead managers, Morgan Stanley and WestLB who between them appear to have taken on at least a quarter of the issue. WestLB also appears to have earned itself a fat fee by underwriting a large portion of the offer.

Those who would still like a piece of the action will be able to find the bond listed on that well-known market, the Luxembourg Stock Exchange.

The full prospectus is not out yet of course, so we will just have to wait to thrill at how Bernie has dealt with the ongoing European Commission investigation into his hold over the sport and other awkward regulatory issues.

Bernie has made several pit stops to change financial advisers. Salomon's did not survive the failed float and although Morgan Stanley devised the bond, it was only salvaged when WestLB stepped in to pick up a large slice of the offer.

Nevertheless, Bernie is now waxing lyrical about the relationship Formula One has established with the investment community and promises he is still on course for a flotation a few years down the track.

He has a big incentive to deliver. The structure of the bond is such that the coupon payments will begin to take a big bite out of Formula One's profits if it still privately owned in five years.

Start your day with The Independent, sign up for daily news emails
Sport
sportWWE latest including Sting vs Triple H, Brock Lesnar vs Roman Reigns and The Undertaker vs Bray Wyatt
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
tvPoldark, TV review
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

No postcode? No vote

Floating voters

How living on a houseboat meant I didn't officially 'exist'
Louis Theroux's affable Englishman routine begins to wear thin

By Reason of Insanity

Louis Theroux's affable Englishman routine begins to wear thin
Power dressing is back – but no shoulderpads!

Power dressing is back

But banish all thoughts of Eighties shoulderpads
Spanish stone-age cave paintings 'under threat' after being re-opened to the public

Spanish stone-age cave paintings in Altamira 'under threat'

Caves were re-opened to the public
'I was the bookies’ favourite to be first to leave the Cabinet'

Vince Cable interview

'I was the bookies’ favourite to be first to leave the Cabinet'
Election 2015: How many of the Government's coalition agreement promises have been kept?

Promises, promises

But how many coalition agreement pledges have been kept?
The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

The death of a Gaza fisherman

He built his own reef, and was fatally shot there by an Israeli gunboat
Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

Saudi airstrikes are fuelling the Gulf's fire

Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

The only direction Zayn could go

We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

Spells like teen spirit

A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

If fashion is a cycle, this young man knows just how to ride it

British designer Jonathan Anderson is putting his stamp on venerable house Loewe
Number plates scheme could provide a licence to offend in the land of the free

Licence to offend in the land of the free

Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

From farm to fork in Cornwall

One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

Robert Parker interview

The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
Don't believe the stereotype - or should you?

Don't believe the stereotype - or should you?

We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor