Warburg spurns F1 bond issue
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Your support makes all the difference.ATTEMPTS BY Formula One motor racing promoter Bernie Ecclestone to raise $2bn through a Eurobond issue suffered a serious setback last night after Warburg Dillon Reed, the investment bank, declined to become part of the syndicate of banks being out together to market the deal.
Warburg which was last week approached by Morgan Stanley Dean Witter, the lead bank for the issue, to participate last night insisted that the decision not to take part in such a syndicate was "not unusual".
A Warburg spokesman said: "No bank automatically accepts every invitation to participate in a syndicate of this kind."
However, it is understood that a number of senior Warburg bankers had deep misgivings about a number of aspects of the deal. They were particularly concerned at the lack of certainty about the status of the television contracts whose cash flow underpinned the deal.
These contracts are currently being investigated by Karel Van Miert, the European Commissioner for Competition.
Some present at the meeting at which the decision not to participate was taken were also concerned about launching a deal so close to Christmas. They also felt that by seeking raise $2bn in one go, Formula One and its advisers were being too ambitious, particularly in view of the fact that the bond markets have yet to fully recover from last August's shocks.
"We are talking about risk, we are talking about price, we are talking about timing," said one banker last night.
Warburg is so far the only bank approached to have turned down the invitation.
However, Salomon Smith Barney, the US investment bank which was also approached was last night still considering its position.
Mr Ecclestone shelved earlier plans for a pounds 2.5bn stock market bond issue in May partly because of the same competition concerns.
Deutsche Bank, which asked to join the syndicate last week, is still believed to be keen.
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