US asset management company Oaktree Capital have formally approached Bank of America to help refinance Inter Milan’s debt, worth approximately $450 million.
Inter Milan’s owners, Oaktree Capital, have contacted Bank of America in order to refinance the club’s debt, which is made up of an estimated $450 million in high-yield bonds.
That is according to Il Sole 24 Ore, who report that Inter are looking for ways to refinance the outstanding payment, which is due to mature in the near future.
Inter Milan’s Debt Explained
Despite widespread financial liabilities across Italy’s soccer pyramid, Inter Milan top the list of Serie A clubs with the most debt.
US hedge fund Oaktree Capital assumed control of the Nerrazzuri after former owners the Suning Holdings Group — one of China’s largest commercial retailers — defaulted on a $450 million debt payment, that matured in May of last year.
Former chairman Steven Zhang saw his own personal net worth plummet from a peak of $6 billion to almost nothing, with the majority of his assets currently pledged as collateral.
In 2021, Oaktree floated a $314 million emergency loan to Suning, who were struggling to keep Inter’s cost in check post-pandemic, whilst also grappling a failed $22 billion failed investment in now-bankrupt China Evergrande Group.
The club’s day-to-day operating costs have drastically improved under the stewardship of Oaktree Capital, largely fulled by a notable period of success on the pitch, and a general consensus amongst board members to cut what used to be a bloated wage bill.
For reference, Inter have reported a net profit of $78 million in the transfer market across the past five seasons. During this time they sanctioned blockbuster sales for Achraf Hakimi and Romelu Lukaku, whilst simultaneously reigniting the careers of Francesco Acerbi and Henrikh Mkhitaryan, for cut-price fees.
Even in the face of big-name departures, they have reached two Champions League finals and lifted a Scudetto within that time frame. Offshore sportsbooks have them favored to snatch back their Serie A title from Napoli next season.
Bank of America’s Strong Track Record in Soccer
With the debt due to mature in the not-so-distant future, Oaktree Capital are eager to refinance the collateral they collected last year, in order to safeguard Inter’s long-term security.
Oaktree have enlisted the help of multinational wealth management experts Bank of America, who have a strong track record of forays into soccer financing.
In fact, Bank of America have experience very close to home for Inter, having brokered in the Elliott Investment sale of city rivals AC Milan to RedBird Capital Partners, having helped refinance their debt.
The bank also helped finance Real Madrid’s $2bn renovation of the Santiago Bernabeu.
Inter Milan Accused of Reporting Fake Sponsorship Revenue
The tenure of the Suning Holdings Group was underlined by gross financial mismanagement, mounting wage bills and a lack of direction on the pitch.
To make matters worse, a new report from a financial advisor, hired by a prospective buyer for Inter, shed a damning light on the club’s finances between 2016 and 2019.
The report uncovers a complex web of fake sponsorship revenue, potential institutional cover-ups and fictitious accounting, all the while claiming that Inter should have entered liquidation, had it not been for the illegal smoke screen.
For the moment these accusations are yet to be proven, but it is a blow to the system just as Oaktree look to have got the club back on the straight and narrow.
