River, one of the most prestigious clubs in the world, Club River Plate will launch its financial trust today to the capital market. This is an unprecedented event for a local football club, but it is doubly so: on the one hand, financial engineering will be put at the service of a sports institution and will make it possible for anyone to invest in River: on the other, This investment will immediately impact the club’s financing and will be transformed into an ambitious works plan.
“In another milestone for the Institution within the framework of consolidation and professionalization in each of its areas,” he told Ámbito Andres Ballottatreasurer of the Club and added: “This is a completely innovative and disruptive event for the football industry, with an outstanding rating (A+), which marks the economic and financial solidity of the Institution.”
According to Ámbito, The trust will be with a 30-month UVA adjustment, with a rate of 9% annually on the indexed capital. That is to say: the FF UVA will pay the inflation of that period plus a rate of 9%. The bidding will begin on October 3 and It can be subscribed through Banco de Valores SA, together with the member agents of ByMA, PP Inversiones SA, Banco CMF SA, Banco Supervielle SA and Banco de la Ciudad de Buenos Aires.
To invest:
- You must transfer pesos to your broker’s client account.
- The minimum amount to invest is 10 UVAs, equivalent to about $12,000.
- Every three months, the FF pays you an income.
- After 30 months, the investor will receive all the capital invested.
- The FF UVA pays inflation in that period, plus a rate of 9%.
Financial engineering, rate and term for the investor
It goes without saying that, as the reader will know, a financial trust is a legal instrument also used in other areas of economic life, which allows a company or organization, -in this case the Club Atlético River Plate (CARP)-, to participate in the financing of projects by advancing future payments determined by placing different capitals on the market as collateral.
As Ámbito learned, the board of directors chaired by Jorge Brito aspires to obtain nearly $20,000 million in order to assign greater speed and momentum to the conclusion of infrastructure works in the coming months. In this sense, The institution wants to build a new sports center, located within the Mâs Monumental property, which will include new fields for hockey, futsal, handball and volleyball and which will facilitate sports practice for more than 5,000 federated members.
On the other hand, a new River Institute building, which will be located within the Club propertybut separated from the stands of the Stadium where it operated until now. With entry from Sáenz Valiente, the CARP maintains that “it will guarantee an environment dedicated exclusively to an educational community made up of more than 1,700 students.”
At the same time it will be carried out a new facility for training football with the construction of six fields to be used by the different categories, while works and remodeling will be carried out in the Mâs Monumental and the different sectors and areas of the Club. These works join those that are underway such as the union of the four stands or the installation of a new LED screen on the Sívori.
The FixScr rating, a key for the investor
According to Ámbito, the amount projected through the Trust does matching to the total income to be received in the coming years from the naming of the stadium, the Somos River program and the rights for marketing stalls, since, they maintain, the purpose of these resources was always intended for the renewal of infrastructure. This financial instrument, the club explains, “allows these resources to be advanced and repaid within the period provided for in the contract, since it represents a low percentage in a reform plan that over the last few years involved an investment greater than the u $150 million with own funds.”
From Núñez, they assure that The A+ rating assigned by FixScr puts River on par with the country’s large companies and enables the club to access the capital market to fund itself at a very competitive rate. At the same time, they draw a comparison with those institutions that, by not having such support and financial engineering, must be financed with other instruments, which ends up leading to a longer payment term, interest and a lower amount in the total funding.
Source: Ambito
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