Football's world governing body, FIFA, confirmed today it plans to sell a $250 million bond that market sources said will insure the 2006 World Cup championship in Germany.
The sources said a successful sale would make bondholders rather than FIFA responsible for costs if the 2006 soccer World Cup in Germany is cancelled. In return, FIFA will pay bondholders for taking on the risk.
Mr Andreas Herren, a spokesman for Zurich-based FIFA, confirmed the bond sale but declined to give further details, citing regulatory restrictions in the United States where the bond will be marketed.
The bond will be denominated in dollars, Swiss francs and euros, and will be sold to bond portfolio managers and insurers worldwide. The bond is expected to mature in 2006, according to the source.FIFA said Credit Suisse First Boston will sell the bond on its behalf.
FIFA is expected to come up with pricing details later in September after investor feedback. FIFA operates on a four-year budget cycle from one World Cup to the next. It said in April 2003 its 1998-2002 budget accounts beat projections with a surplus of $82 million.
The organisation is projecting a surplus of $121 million for the 2003-2006 budgeting period, including income from TV rights, marketing, event hosting, brand licensing and match levies.