III. FINANCING

1. Background

At the Assembly of Delegates held on 23 October 2021, the delegates approved by majority the Financing Plan for the Espai Barça Project, and this was subsequently ratified by the members in the referendum held on 19 December 2021 with a majority of 87.8% of the votes.

The Board of Directors was authorised to carry out the necessary actions to obtain financing for the Espai Barça project for an amount not exceeding €1.5 billion.

In this process the members approved the following:

“• Financing shall be understood to be any operation that (i) makes it possible to obtain financing to carry out the Espai Barça Project; and (ii) can be guaranteed with the income related to the running of the Camp Nou, the Palau Blaugrana and the Espai Barça Campus, or paid for through the cession of this income in the amount necessary to return the financing and its costs.

• The Espai Barça Project will mean all or any renovation project of the Camp Nou, the construction of a new multi-purpose stadium (the Palau) and the construction of the Espai Barça Campus (areas around the new spaces). ”

2. The financing process

The Club has passed all the financial, legal and compliance reviews and due diligence required by the investors, and is fully satisfied and confident in the soundness of the project and that the Club has control measures in place and a Compliance System aligned with international standards.

Having the maximum guaranteed price for the execution of the works established in a signed contract prior to the completion of the financing significantly mitigates one of the main risks of any work, which is the cost and duration of the construction.

3. Assignment of the project’s rating by the Rating Agencies

During the process for defining the best financial structure, the Club and its advisors have studied different possible alternatives and finally, in order to comply with all the commitments assumed with its Members and at the same time gain flexibility, it has opted for the current structure which carries an associated BBB rating.

 The rates associated with the operation are in line with market interest rates.

4. Approval of the financing

FC Barcelona has secured financing for the Espai Barça project, which aims to transform all the facilities that FC Barcelona includes under the Espai Barça umbrella. The financing is fully in line with the authorisation approved by the assembly and the referendum. The construction of the Palau, as reported and presented to the Assembly and in the Referendum itself, will be carried out after the stadium and the estimated timetable for the start of the works is 18 months after the start of the works on the Spotify Camp Nou.

The Club has been working together with Goldman Sachs throughout the process for the design and structuring of the Espai Barça financing plan. In a more advanced phase and with the completion of the first phase of the plan’s definition, the Club also joined forces with JP Morgan as co-partners to facilitate access to the international market on the commercial side.

5. Incremental Income

Throughout the process, FC Barcelona has been analysing different structure formulas to obtain the best financing conditions for the project and also for the Club.

Accordingly, what has been agreed with the investors is that the debt will be repaid with the incremental revenue that the new stadium will generate. There is no guarantee from the Club beyond managing the construction project and the management of the new stadium in a professional and rigorous manner. The Club does not provide any additional guarantee. In other words, as explained at the Assembly, there is a series of incremental revenues generated by the new Spotify Camp Nou that will guarantee the collection of the anticipated amounts, including hospitality/VIP revenues, ticket sales and museum revenues, naming rights and new sponsorships directly related to the exploitation of the new assets.

A specialised external agency has reviewed and validated the internal revenue generation projections made by the Club, and shows that the incremental revenue will be around €230-240 million, showing a more than significant margin to be able to meet the obligations undertaken. The base revenue that the Club retains for these specific revenue lines is around €100 million. It should be noted that the analysis was carried out in October 2021.

6. Financing conditions

Once all the tranches have been released, the total volume of the operation is €1.478 billion. €1.362 billion at the time of the establishment of the ASF and an additional extension of €116 million.

As explained in the press conference, the financing of the Espai Barça is a live operation in which flexibility has been prioritised and therefore having access to the refinancing of tranches when the construction has been completed and therefore this risk is eliminated. The financial cost during the construction process is higher than when the work is finished. For this reason, €1.088 billion are expected to be refinanced over the next few years at a lower cost. Furthermore, if market conditions improve, the Club maintains the possibility of refinancing a larger amount.

The estimated cost of the total financing of Espai Barça is 5.53%. This average cost is obtained by considering the current cost of the outstanding balance of the financing, as well as the estimated costs of refinancing that are contemplated in the future given the flexibility of the structure. In addition, it takes into account the positive effect derived from the remuneration of the current cash balance, which will be exhausted as the works are carried out. The financing structure has been designed to ensure that the construction risk does not penalise the Club during the life of the financing. To this end, a series of refinancing facilities have been designed once the stadium is fully completed and operational, at which point the Club, together with its advisors, Goldman Sachs and JP Morgan, believe it will be possible to obtain financing on more favourable terms.