MetLife and Ares in dispute over Eagle Football restructuring

MetLife and Ares Management are at odds over a proposed restructuring of Eagle Football, the multi-club group with stakes across France, Brazil and Belgium, in a process that is being shaped by Olympique Lyonnais’ near-term licensing and funding requirements.Ares is seeking creditor backing for a plan after Eagle accumulated heavy borrowing, with some lenders being asked to accept longer repayment timelines, according to people familiar with the situation.The negotiations are complicated by the position of MetLife, whose exposure is linked to Lyon’s stadium financing and the cashflows generated by Groupama Stadium, the people said.Eagle Football Group said: “Our financial situation remains critical due to legacy exposures, write-downs on receivables from related parties, and the urgent need to secure a financing and restructuring solution.”Lyon have qualified for European competition next season, yet they still face a pre-season licensing process and must demonstrate adequate financing by next month to avoid renewed intervention from France’s DNCG watchdog.Ares has told stadium creditors that relegation risk matters because a drop to the second tier could weaken matchday and premium hospitality demand, potentially pressuring stadium-linked revenues.MetLife has pushed back on the current approach, the people familiar said, while Ares is not planning to inject new capital as part of the restructuring plan, according to some of the people. Representatives for Ares and MetLife declined to comment.Ares has provided more than US$400m of financing to Eagle and has marked down part of its investment, according to public filings cited by people familiar with the situation.The insurer is an unusual presence in this type of restructuring because the Lyon stadium revamp was financed with infrastructure-style private placement notes, which are typically bought by insurance companies and are often investment grade.Lyon’s €320m notes pay 5.8% interest and are due in 2044, and they received investment grade ratings when they were refinanced in 2023.DBRS Morningstar confirmed the investment grade rating last month but revised its outlook to negative because of Eagle Football’s financial position, warning that relegation would likely weaken the credit profile even if it did not automatically trigger a default.Eagle Football Bidco entered administration proceedings in the UK in March after defaulting on Ares-provided debt, escalating pressure on the group to deliver a wider refinancing package.The latest process also sits alongside governance change at Lyon, after the DNCG provisionally relegated them last year before the decision was reversed following an equity injection and leadership changes at the club.DBRS has noted that changes in control within the group could be considered a change of control under the stadium note documentation, which can create an early repayment mechanism, even if noteholders are unlikely to exercise it.Eagle disclosed earlier this month that it had recorded €126.2m of write-downs on related-party receivables linked to Lyon, contributing to a net loss of €186.5m as of December 31.