FC Barcelona pauses €1.5bn Camp Nou stadium financing

FC Barcelona has paused a €1.5bn fundraising after baulking at the terms of the deal amid an increase in US borrowing costs, forcing the football club to weigh up alternative financing arrangements, according to three people with knowledge of the plans.

The deal was meant to be priced late last week, one of the people said, but negotiations with private investors stalled as a flurry of recent inflation data pushed up US borrowing costs to 2007 levels.

The situation was “fast-moving” and Barcelona could soon decide on a new method of financing, according to another person briefed on the deal, which is meant to pay for the revamp of its Spotify Camp Nou stadium.

Kroll Bond Rating Agency had given the club’s planned private placement a preliminary rating of triple B plus and a stable outlook on February 3 but later that month it lowered it to triple B, citing a revised financing structure comprising a five-year €200mn bank loan and five tranches of senior notes.

KBRA said two of the tranches were expected to be issued in US dollars and “swapped back to their euro equivalent”, leaving the club more exposed to US interest rate movements. The club had previously planned to issue three equal tranches of €500mn senior notes. The agency said the change “introduces additional refinancing and interest rate risk”.

Club sources said Barcelona was “working to optimise the terms and flexibility of the final financing structure” and that it still intended to have funding in place by its March-end target.

Wall Street investment bank Goldman Sachs is the club’s longstanding partner on its stadium financing. JPMorgan and Key Capital are also working on the placement. They declined to comment.

The Catalan team, which is owned by its members, is seeking to refurbish Camp Nou — a top priority for Barcelona president ​​Joan Laporta, who was elected by members in 2021 to lead a turnround at the club, increase revenues and restore sporting success.

Barcelona is embroiled in a scandal over payments it made over several years to a former referee, José María Enríquez Negreira, who was part of the Spanish football federation’s refereeing committee.

On Friday, Spanish prosecutors lodged a formal complaint against the club and some of its former officials over alleged corruption relating to the payments. In a court document prosecutors said the actions were intended “to favour [FC Barcelona] in the decisions of referees in matches played by the club”. The club has previously said the payments were for reports on referees and youth players and has denied wrongdoing.

An official said: “The complaint has not yet reached the club, so we don’t know anything officially. The club will not make a statement until the complaint arrives and is studied by the legal department.”

The club has not won Spain’s La Liga title since 2018/19. The Covid-19 pandemic wiped out ticket sales and left the club fighting for survival as debts came due, while high player wages and expensive transfer signings also weighed on its balance sheet.

It recorded a €500mn loss following the 2020/21 season, a record for any football club. However, it returned to profit in 2021/22 for the first time since before the pandemic.

It had net debt of €608mn at the end of June 2022, according to its latest annual report. The figure includes net debt for player transfers and other borrowings after deducting cash.

Football clubs, including arch-rivals Real Madrid, are modernising their stadiums to increase revenues by turning them into multipurpose arenas.