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It has struck a new funding deal with HSBC and Goldman Sachs
The Welsh Rugby Union has refinanced its debt on more favourable terms with a new £60m facility. The union has entered into a short-term bridging funding arrangement with HSBC and US investment bank Goldman Sachs.
It has refinanced in full debt facilities it had with NatWest Bank, around £35m, and £12.4m owed to the Welsh Government. The deal significantly increases debt levels.
It said that its aim is still to negotiate a longer-term debt facility, potentially up to 20-years, at the end of the new three-and-a-half year deal, which could be used to fund significant improvements to the Principality Stadium.
The Cardiff Bay administration provided a commercial loan of around £18m to the union in 2022 after it refinanced a Coronavirus Large Business Interruption Loans Scheme (CLBILS) funding package the WRU had struck with NatWest. The WRU passed through the initial NatWest loan roughly equally to the four regions in Cardiff ( now WRU-owned after acquiring it out of administration last year), the Dragons, Ospreys and Scarlets, who are liable for the interest and capital repayments.
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The CLBILS had to be refinanced within three years and with limited options the union turned to the Welsh Government. The interest rate was negotiated at the current Bank of England base rate (then 0.25% but now 5.25%) plus a 3% margin. Following a spike in inflation during the pandemic the regions were at one stage faced with an eye-watering interest rate of more than 8%.
The new arrangement is on improved terms including more commercial flexibility and less restrictive covenants.
HSBC will provide the core banking facilities. Some £5m of the £60m has been assigned for yet to specified capital projects at the Principality Stadium.
Chief executive of the WRU, Abi Tierney, said: “We are grateful to the Welsh Government for their support for Welsh rugby over the course of the pandemic, but we are delighted to announce today that we have completed our refinancing with Goldman Sachs and HSBC.
“Putting Welsh rugby’s finances on a secure footing has been a key priority for us and this new arrangement will provide much needed financial stability for the future of the game in Wales.
“We are currently transforming the structure of our professional game, having decided to reduce the number of professional sides in Wales from four to three. The central part of our new ‘The Way Forward/Ymlaen’ strategy is about increasing our levels of investment across the whole game.
“From next season we will invest an extra £28m in community and professional pathways over a five year period to maintain a production line of young Welsh talent and a new licensing deal currently being negotiated with our professional sides will ensure they are competitive once again with their peer groups in budget terms.”
Giving evidence to the Welsh Affairs Committee in Westminster, chairman of the WRU, Richard Collier-Keywood said the funding from HSBC and Goldman Sachs provides a lower interest rate of around 1%
He told the cross-party MPs on the committee: “When I first arrived we were absolutely up against our banking covenants and we were in special measures with our major bank (NatWest) so couldn’t do anything financially without talking to our bankers. We were really up against it from a financial perspective. So, for the last two years we have been improving the finances.”
He said its latest accounts for the year to the end of June, 2025 has seen a “significant rise in its earnings profile.”
The chairman said: “We have also completed a major refinancing of all the debt with the Welsh Rugby Union, repaying NatWest Bank and the Welsh Government (via the Development Bank of Wales).
“We are now being backed by two international organisations, in Goldman Sachs and HSBC which again sets a bedrock for the future of Welsh rugby. Either of those two organisations would have invested in us if they had any concerns about our governance or the future plans we have put forward to them. We are now on a sustainable financial footing.”
HSBC will provide the core banking facilities. Some £5m of the £60m has been assigned for yet to be specified capital projects at the Principality Stadium.
The revised structure of the loans simplifies existing debt into a single, longer-term interest-only £30m loan, together with a rolling credit facility (RCF) of £25m and further capacity to draw down £5m of future loans when needed.
The new arrangement is on improved terms including more commercial flexibility and less restrictive covenants
On the terms of the debt Mr Collier-Keywood said: “The terms are better from what we had before with Welsh Government by around 1% – Sonia (Sterling Overnight Index Average) plus 2.75%. He confirmed the initial focus on was looking at a long-term deal (10 to 20 years), potentially via US paper markets. “
He added: “But having taken some advice we had refinanced for around three-and-half years which we see as essentially a bridge to allow us to make the investments we need to make in this cycle. In about two years we will go out to look at a longer term debt, which could allow for significant redevelopment work on the stadium and related areas.”
The WRU has confirmed it has entered into negotiations with a preferred bidder to acquire Cardiff Rugby. While it has not disclosed the preferred bidder it is understood to be owner of the Ospreys in sport and media group Y11. With the WRU seeking to reduce the number of regions from four to three, a Y11 deal for Cardiff could achieve that aim.
Y11 is majority-owned by Malaysian-based private equity firm Navis Capital Partners.
Mr Collier-Keywood said that investors in rugby, not just in Wales but globally, are effectively emotional investors and were doing so because they “loved rugby” with no prospect for any returns.
He added: “We are trying with Y11 and Ospreys to create a different model going forward. with that. Rugby clubs can be valued on the value of their turnover, if you think of other forms of sport. So, it is very handy to have a private equity player in that market to help us understand that and to work with us and help us as we think of how best to create an environment over the next five to ten years when you will attract investment in for investment’s sake.”
