Inter's Financial Situation

.h.

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Unfortunately we are still under chinese beggars...So enjoy incoming Caicedo,Petagna or similar crap here while fkn Vlahović goes to rube. Next seasons we are gonna return to banter era with these poor chinese beggars.
so..they're gonna take us back to where we were before they bought the club?
 

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Suning is basically Thohir 2nd version, filling this team with random 404 mediocre players and shit financing, and greed also.

Suning fund Inter by add previous debt with new debt, create multiple debts. And this time, they collapse because their original business going bankruptcy, creating their own debt in China markets. Yikes.
 
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bubba zanetti

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so..they're gonna take us back to where we were before they bought the club?
And thats ok to you? Great. Because we are heading there. This season,maybe next we will be relevant and thats it. With these beggars we cant compete with top clubs.
 

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And thats ok to you? Great. Because we are heading there. This season,maybe next we will be relevant and thats it. With these beggars we cant compete with top clubs.
they paid for us to get there in the first place. No, its not okay by me really, and I think they'll sell before that - because a club that's not in the CL with banter-era players is pretty much worthless.
 

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The refinancing and this, what does it mean, we are fucked?
Nothing unusual about that. It's the same as juve saying the potential punishment for the plusvalenza scandal is relegation and huge fines. It's a financial document, so they need to be fully transparent around all the risks.

The real question we need an answer to is what the rate on the 415m is at.
 

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Nothing unusual about that. It's the same as juve saying the potential punishment for the plusvalenza scandal is relegation and huge fines. It's a financial document, so they need to be fully transparent around all the risks.

The real question we need an answer to is what the rate on the 415m is at.
I don't remember the source but i had read it could be around 10%. I will search for it and post it if i find it.
 

brehme1989

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I don't remember the source but i had read it could be around 10%. I will search for it and post it if i find it.
Previous one was 4.875%! You sure you read that right? o_O

You realize that this rate is worse than Greece under Tsipras? :D
 

brehme1989

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Fitch Rates Inter Media's Notes 'B+(EXP)'; Stable Outlook

Fitch Ratings - Madrid - 24 Jan 2022: Fitch Ratings has assigned Inter Media and Communications S.p.A.'s (Inter Media) senior secured fixed-rate notes a 'B+(EXP)' rating. The Outlooks is Stable.

The final rating is contingent upon the receipt by Fitch of final documents conforming to information already received as well as the final pricing and financial close on the proposed notes.


RATING RATIONALE
The expected instrument rating reflects the consolidated credit profile of Inter Milan, predominantly constituting F.C. Internazionale Milano S.p.A. (TeamCo) and Inter Media, and the structural protections of the Inter Media financing structure.

Inter Milan's consolidated credit profile of reflects the stability of Serie A within the European football landscape and the franchise strength internationally, with elevated current and projected leverage. The coronavirus pandemic and resulting restrictions have had a significant impact on TeamCo, leading to reduced revenue as a result of no/partial fan attendance at games since February 2020. This has coincided with a period of high player wages leading up to the pandemic and significantly reduced international sponsorship revenue expected in the coming years. Overall, this has reduced Inter Milan's revenue diversity and created greater reliance upon on-pitch performance and shareholder support during upcoming periods of negative cashflow generation.

Management's business plan intends to normalise leverage levels, but this carries execution risks and is not expected before FY25 (financial year ending June) at the earliest.

The notes benefit from preferential recourse to pledged media and commercial revenues, partially insulating investors from many of the ongoing operational risks that are present on a consolidated basis.


KEY RATING DRIVERS
Prestigious League with Access to UCL - Revenue Risk: League Business Model: 'Midrange'


Serie A is the fourth most valuable football league in Europe by annual revenue and benefits from the top four positions having access to the lucrative UEFA Champions League (UCL) competition. Broadcast rights for Serie A have already been renewed for 2021-2024 and the distribution mechanics of league broadcast rights allow a largely stable base revenue stream for teams regardless of league position. The league's competitiveness is somewhat supported by UEFA Financial Fair Play regulations, which monitor clubs' financial sustainability, although it has a limited history of effectiveness and the potential to be reformed.


Iconic European Football Team - Franchise Strength: 'Stronger'

Inter Milan has a 114-year history and historically the highest attendance in the Italian football league. It also has a history of strong performance having won 19 leagues, three UEFA cups and three UCL trophies. In 2020-21 Inter Milan won the domestic league for the first time since 2009-10 and it has competed in the UCL for the past four seasons. The club is also the only team in Italy that has never been relegated out of Serie A.

The club can leverage on an affluent fan base, with Milan being a large metropolitan area and the business capital of Italy, which is largely economically supportive of its two main clubs, Inter Milan and AC Milan.

Revenue diversity has declined in recent years, in particular due to expiration of several Asian sponsorship contracts that have not been replaced. This has increased reliance on on-pitch performance, potentially leading to greater revenue volatility.


Historic but Dated Stadium - Infrastructure Development & Renewal: 'Midrange'

Inter Milan plays at San Siro, a renowned stadium in Milan of around 76,000 seats that belongs to the city. The stadium is one of the largest in Europe and the largest in Italy, and is also home to AC Milan. Although the stadium is old, it is considered a UEFA category-four stadium, the highest possible, despite lacking modern facilities and the large number of executive suites of modern European stadiums.


Concentrated Refinancing - Debt Structure: Weaker

The new notes will be senior at Inter Media, fixed rate and only partially amortising with 94% due at maturity in five years, leading to significant refinancing risk. Fitch considers the refinancing risk is broadly linked to the consolidated group's performance. Fitch's analysis is therefore based on a consolidated approach to Inter Media and TeamCo, although structural features offer some protection to investors. The cashflow waterfall at Inter Media gives investors a senior claim on pledged revenues that ensures payments are made to investors, and reserve accounts are funded, before any distributions are made to TeamCo.


Parent & Subsidiary Linkage Assessment

Inter Milan controls Inter Media, which contributes roughly 30% of TeamCo's FY21 revenue (unadjusted). Ring-fencing provisions at Inter Media restrict TeamCo's access to Inter Media cashflows under certain conditions, although these restrictions offer limited protection to bondholders, given the bullet maturity of the debt. Under the Parent & Subsidiary Linkage criteria, we therefore assess the 'Access & Control' of Inter Milan to Inter Media as 'Open' with 'Porous' legal ring-fencing, leading to the single-notch rating uplift compared with the consolidated credit profile.


Financial Profile

Fitch's financial forecast highlights the recent deterioration in the financial profile, with negative EBITDA expected in FY22. Under the Fitch rating case, Fitch-adjusted net debt/EBITDA reaches 21.0x in FY23 followed by 9.5x in FY24 and 5.6x in FY25.


PEER GROUP
Inter Media has one peer publicly rated by Fitch, Fútbol Club Barcelona (FCB, BBB-/Stable). It is a rating on FCB's private placement instrument and is also rated on a consolidated basis. Both clubs have similar assessments for league ('Midrange'), franchise ('Stronger') and infrastructure renewal ('Midrange'). Although Inter Milan and FCB have a 'Stronger' assessment for franchise, FCB has a far bigger fan base, significantly stronger and more diverse revenue generation, and in our view, a stronger global brand. Inter Media also has a 'Weaker' debt structure assessment, compared with FCB's 'Midrange', due to the concentrated bullet maturity compared with FCB's staggered debt maturities. FCB's financial profile is also significantly stronger under Fitch's rating case, with significantly lower leverage by FY23 when compared with Inter Milan's Fitch-adjusted net debt/EBITDA of 21x in FY23.


RATING SENSITIVITIES
Factors that could, individually or collectively, lead to negative rating action/downgrade:
Deterioration in Fitch-adjusted net debt/EBITDA to above 7.5x on a sustained basis as a result of reduced revenue stability, increased costs or material increase of player trading expenses.


Factors that could, individually or collectively, lead to positive rating action/upgrade:
Fitch-adjusted net debt/EBITDA sustainably below 6.5x as a result of a sustained period of high revenue, improved diversification of revenue streams and evidence of prudent cost management, provided there is a clearer view of medium-term wages/revenue ratio and player trading.


BEST/WORST CASE RATING SCENARIO
International scale credit ratings of Sovereigns, Public Finance and Infrastructure issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of three notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579.


TRANSACTION SUMMARY
Inter Media is expected to issue EUR415 million fixed rate notes to refinance existing debt. We rate the notes using the Sports Criteria and Master Criteria to determine the consolidated credit profile. We apply the Parent Subsidiary Linkage to notch up to get to the instrument rating. Inter Media is the main cash generating unit within the Inter Milan group, albeit its revenue generation is ultimately linked to the TeamCo football and financial performance.


FINANCIAL ANALYSIS
Fitch analyses the club on a consolidated basis and focuses on Fitch-adjusted net debt/EBITDA as the primary metric. As part of our financial analysis we have updated our assumptions to reflect the latest financial and on-pitch performance, participation in international competitions, expectation for stadium attendance, player salaries and net player trading. As part of this update, we have also reflected management's latest business plan and the loss of Asian sponsorship agreements. This leads to less diverse revenue and greater reliance upon on-pitch performance. In particular, there is now greater reliance upon qualification to the UCL, which we do not assume on an ongoing basis in the Fitch rating case.

The updated financial analysis results in low cash flow generation and negative EBITDA in FY22 leading to significantly increased leverage. Under the Fitch rating case, Fitch-adjusted net debt/EBITDA reaches 21.0x in FY23 followed by 9.5x in FY24 and 5.6x in FY25.


REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING
The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG CONSIDERATIONS
Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/esg
 

brehme1989

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B+ is junk, just fyi. Considered "highly speculative".

You have BB-, BB and BB+ to jump over, which are still junk, and investment grade starts at BBB-. Happy 2025.

@Adriano@10 I'm sure you'd like to chip in with the ratings and the Fitch report.
 

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I'm not surprised about the rating, but if it does come out to 10% that'll be higher than I expected. That being said, i'm not surprised its significantly higher than the original one - the credit risk is substantially higher. The previous one was pre-pandemic, and pre-300m euros of losses.
 

brehme1989

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Juventus 2019 bond was at 3.50%. They had Cristiano and thought they'd cash that in. It's even called CR7 Bond :D It wasn't a big one, but still significant 9 figures.

They'll probably have a new one so we can compare. I cannot find their credit ratings though, which is surprising for a listed company. Not even on their website.


All of the published info is here, but still cannot find much about their credit ratings.


Even the 2019 one says it was unrated.
 

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Previous one was 4.875%! You sure you read that right? o_O

You realize that this rate is worse than Greece under Tsipras? :D
I can't find it now but i think so. Maybe it was referring to Oaktree loan rate and i got it mixed up. I will keep searching for it.

And yeah. I realise such a high rate would be catastrophic. That's why i remember it.
 

brehme1989

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I can't find it now but i think so. Maybe it was referring to Oaktree loan rate and i got it mixed up. I will keep searching for it.

And yeah. I realise such a high rate would be catastrophic. That's why i remember it.
You're mixing it up with the Oaktree loan, a week or so media reported it was 10% and three years long and some other details.

For this one we still do not have details on this one. Not on Calcio e Finanza, not Il Sole 24 Ore, not Fitch from their report today, not on financial outlets, not on Inter website. So I find it odd that someone else would know and come up with a %.


But a B+ Fitch rating for a corporate bond iirc means that you're looking at 5-6%. Maybe more if the outlook is negative. It's not territory I got familiar with, I only dealt with low investment grade bonds at worst, but I dealt with crap sovereign bonds and that's usually 7-9% with similar Fitch ratings.

P.S:

There's also this from December. Don't recall our previous rating from the bond issuance, but I would guess our 4.875% was with a BB-, so we're looking at possibly the 6.5% region here.
 

.h.

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It'll be dutch auction (??? I think? I'm not a bond investor) to see where the volume gets filled
 
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