Except for the fact that the banks have new owners and new lending policies, you mean?
A new loan will be approved if and only if G&H convince the banks, in accordance with the stricter criteria, that the loan could (in principle) be paid off in full at the end of the new loan period.
I cant speak for Wachovia, but I think RBS's new policy is clear. If they are not satisfied that a new loan could be repaid in full, then they do not renew. On the contrary they insist on the payments under the existing arrangements and if there is any shortfall (after the personal guarantees have been taken into account), then they write off the remainder as a bad debt.
IMHO, the new loans that will be offered to the LFC companies will be smaller than the existing loans UNLESS G&H come up with larger personal guarantees than the current ones (and I do not think they would be willing or able to do so).
Having said that, the news on the new TV deals must be much better than expected. Not only has the money gone up (only by a small amount, but it was already huge), but the most secure company, Sky, has now got 5 of the packages. So the risks of one of the TV companies going bust during the new deal are as low as could have been hoped for. All of these factors will improve their banks' view of the lending risk.
We both agree that a renewed loan will require more cash in to ease the LTV ratio. The assertion that a new loan "will not be given" though,is just plain wrong.
The rest of what you say is broadly true, but a bit misleading to the casual observer.There is no question of any guarantees being surrendered - because we are aware of no default on payment. And, assuming that our debt is circa the £300 odd million mark that is "covered "by the residual value of the club after a disposal of our star players. (Man City sold for £220m pro rata, a similar sized club less star players).
Banks actually NEED to lend money at the moment, to make money, its just the security has to be right, and we are not nearly as badly off in this regard as some would make out.You were right to echo my earlier point that the new TV deal will be better, not worse than the existing one.
I agree that G&H are unlikely to want to fund easing the LTV ratio - and I think that we both agree that the "solution" will be a new minority interest cash injection with Gillett most likely to dispose.
