LONDON, Oct 15 (Reuters) - Investors have been asked to sign up to a high-risk 135 million pound ($219.3 million) bond backing next year’s Formula One British Grand Prix at Donington Park, an official document showed.
The bond sale comes as Donington Park owner Simon Gillett is under pressure to provide financial guarantees needed to host the race.
On Monday, Formula One supremo Bernie Ecclestone gave the track operator two weeks to come up with the necessary guarantees. [ID:nLC091003]
Donington has promised to invest 100 million pounds to revamp the circuit over a five-year period.
Investor meetings for the seven-year bond, arranged by bankers from Citigroup (C.N), began on Thursday, according to the document, seen by Reuters.
Buyers of the bond will receive annual interest of 15 percent as well as warrants over a future share issue, the documents show.
Rating agency Standard & Poor’s (S&P) on Thursday assigned the issuer Donington Holdings a CCC+ rating, seven notches below investment grade.
“The ratings on Donington reflect our view of the significant construction and marketing risks relating to the upgrade of Donington’s racetrack and development of hospitality facilities,” said S&P analyst Silvia Ortolan.
Donington Park won the right to hold the British Grand Prix from Silverstone, where the event has been staged since 1987.
The sale of the notes, expected next week, is the latest low-rated bond to come to the European high-yeld market as European banks remain reluctant to take risks. [ID:nL5579693]
(Reporting by Tom Freke)