Club announcement - finance | Vital Football

Club announcement - finance

#1
I reported all this 3 weeks ago; today they've confirmed it - why it's taken them so long, I'll never know - we don't do anything quick here do we?!!

Club announcement - Finance update - CCFF repaid, short-term debt replaced with long-term

@SpursOfficial
Fri 18 June 2021, 09:00|Tottenham Hotspur



The Club has completed on an institutional fund raising of £250m, with an average tenure of over 20 years and an average interest rate of circa 2.8%. The debt stack includes a new 30-year tranche, with a bullet repayment in 2051 and is a unique financing for any sports entity with the long-term institutional debt markets.
The funds have been used to repay the £175m CCFF funding from the Bank of England, which was used to address some of the shortfall in income caused by the pandemic and will also partially repay a bank loan held by the Bank of America which had a shorter term, moving it to fixed rate 15-year money, locking in low interest rates and extending the tenure of the debt.
Chairman Daniel Levy: “The long-term sustainability of the Club is paramount and the replacement of short-term debt with long-term financing means we are in a secure financial position.
“The Club’s ability to manage effectively throughout the Covid period led to discussions with the same institutions that supported the Club in 2019 to refinance stadium funding. Our institutional investors and banks have been supportive and positive throughout the pandemic despite the uncertainty in the economy and the lack of fans at the stadium for the past two seasons, for which we are very grateful.
“I should also like to take this opportunity to thank all our partners who have continued to support us, in particular our long-term partner AIA. During these challenging times, they have worked alongside us on new ways to activate and engage. We never underestimate the immense contribution this partnership makes to our resilience as a Club.”

Elliott McCabe, Bank of America: “We are very pleased with the overall results and strong support from the existing investors and banks. Once again, Tottenham Hotspur Football Club (THFC) achieved “firsts” in the Direct Private Placement market for Sports, with the long dated bullets topping the 25 years achieved initially with a new 30-year tranche. The results underscore the high confidence in ownership, management and THFC long term.”
 
#7
I guess we won't find out for sure until the end of the transfer window if this announcement was just more posturing or a message to people that we can still compete.
Our 'net' budget will already have been set; the 'variable' will be the net cash inflow from sales.

We can compete up to a point, but we won't be able to compete with clubs in a better revenue/cash position.
 
#12
We could always break FFP rules for a couple of years? It's not like we're going to be in the CL again any time soon so if they ban us it won't matter. :silly:
when we sell Kane, FFP won't matter, our total spend this summer could feasibly be around £140-180 million., of course, the range of spend is affected by how much we get for him; my own view is it will be around £120 mill + add on's, but many seem to think we will get £150 mill for him, personally, I think that's very unlikely.
 

Walthamstow wanderer

Vital Football Hero
Staff member
#14
I take it being in debt for twenty years is better than being in debt for two or three years even though the people that own the club have billions ,,but those billions don’t equate to real money .
So really nobody actually owes anybody anything because nobody actually has any real money ,, the type of money they can spend .

When we sell Kane they just send numbers around the globe by fax or something , but the office lady just uses smaller numbers .
Have I got that right ?

That’s where Daniel is useful . In his office shuffling numbers about .
He seems to be good at that .
 
#15
when we sell Kane, FFP won't matter, our total spend this summer could feasibly be around £140-180 million., of course, the range of spend is affected by how much we get for him; my own view is it will be around £120 mill + add on's, but many seem to think we will get £150 mill for him, personally, I think that's very unlikely.

This is the most important factor in our future.
 
#16
I take it being in debt for twenty years is better than being in debt for two or three years even though the people that own the club have billions ,,but those billions don’t equate to real money .
So really nobody actually owes anybody anything because nobody actually has any real money ,, the type of money they can spend .

When we sell Kane they just send numbers around the globe by fax or something , but the office lady just uses smaller numbers .
Have I got that right ?

That’s where Daniel is useful . In his office shuffling numbers about .
He seems to be good at that .

The time to payout, 20-30 years, at these interest rates is extremely advantageous. The cost of money is very low right now and Levy, using the hard assets as security has stretched it out over an appropriate period of time. The rates are fixed so, as far as I know, we have very little risk if interest rates rise. In principle, it is no different than having a very manageable mortgage on your house.

This is an intelligent, and much-used approach, to financing capital assets. With the additional events occurring at the stadium there will be much reduced pressure on the football club operations to contribute to debt and interest payments over the period.

We have come through Covid in reasonably good shape and Kane, if he leaves, is our path to squad renewal.

Our risks have not really changed despite Covid. They appear they are two fold, but in reality, we have a single risk.

Daniel Levy's ability to complete anything within a reasonable amount of time. While we may view turning things around immediately is critical as we have suffered through the last mistake he made, Mourinho, Levy will likely take at least a 3 year view of getting the club to an elite level.

Unfortunately for him most of us have run out of patience and his legacy, as he appears to be moving on to new things, is in danger of being permanently tainted as the "dark years".

He needs to make sure this season is at least competitive and enjoyable for supporters in order to change that.
 
#17
The time to payout, 20-30 years, at these interest rates is extremely advantageous. The cost of money is very low right now and Levy, using the hard assets as security has stretched it out over an appropriate period of time. The rates are fixed so, as far as I know, we have very little risk if interest rates rise. In principle, it is no different than having a very manageable mortgage on your house.

This is an intelligent, and much-used approach, to financing capital assets. With the additional events occurring at the stadium there will be much reduced pressure on the football club operations to contribute to debt and interest payments over the period.

We have come through Covid in reasonably good shape and Kane, if he leaves, is our path to squad renewal.

Our risks have not really changed despite Covid. They appear they are two fold, but in reality, we have a single risk.

Daniel Levy's ability to complete anything within a reasonable amount of time. While we may view turning things around immediately is critical as we have suffered through the last mistake he made, Mourinho, Levy will likely take at least a 3 year view of getting the club to an elite level.

Unfortunately for him most of us have run out of patience and his legacy, as he appears to be moving on to new things, is in danger of being permanently tainted as the "dark years".

He needs to make sure this season is at least competitive and enjoyable for supporters in order to change that.
All it really does is slightly reduce the valuation of THFC to potential buyers. Levy and Lewis are still getting their equity to grow by all the different types of paying customers, just a bit slower.
 
#18
All it really does is slightly reduce the valuation of THFC to potential buyers. Levy and Lewis are still getting their equity to grow by all the different types of paying customers, just a bit slower.
What they've actually done is enhance the value of the club by replacing higher rate costs with significantly lower ones, effectively increasing/improving post ebitda.