Credit in the straight world

Credit Rating agency AM Best has slashed the rating of 777re, one of 777 Partners's main sources of financing, from 'fair' to 'weak' and 'very weak', casting more doubts around the US group's ability to sustain its current commitments, in football and elsewhere. 

By Philippe Auclair and Paul Brown

Perhaps it shouldn't come as a shock, given that Bermudan regulator BMA had recently stepped in to place 777re into administrative control, pending an investigation into suspected breaches of financial rules. But the brutality of AM Best's credit rating slash will send danger signals throughout all of 777 Partners as a group – as well as through the seven clubs they own wholly or in part, not to mention the Premier League, which has yet to assent to the US group's takeover of Everton FC.

Until last November, 777re, a reinsurance company with a multi-billion dollar portfolio, was thought to be the most profitable of Steven Pasko's and Josh Wander's assets, and was rated A- (excellent) by the agency. As of 16 February, this rating is now C-, indicating 'weak' or 'very weak'. As Josimar has already explained, 777re is a vital source of funding for 777 Partners and their football operations. 

Between April 2019 and December 2021, for example, 777 and certain of its affiliates withdrew at least 570 million US dollars from 777re, with Sevillistas Unidos SL one of those to benefit. Sevillistas Unidos is the entity tied to 777’s ownership of Sevilla FC and Genoa CFC. 777 has also utilised 777re funds to issue its own loans at rates of 15 to 19 percent per annum. Independent financial analysis suggests that by 31 December 2022, 777-controlled entities owe...

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