Spurs finances

[Glenda's Legs]

Just borrowed £175m from the Bank of England

Just saw that. Extract from the Athletic, before the paywall block :

Tottenham Hotspur have moved to ease some of the financial pressure they face as a result of the coronavirus outbreak by borrowing £175 million from the Bank of England, The Athletic understands.

The north London club met a set of strict criteria to qualify for the government’s Covid Corporate Financing Facility (CCFF), which will provide an unsecured loan — repayable in full at a rate of 0.5 per cent — to give them financial flexibility and additional working capital during the crisis. Spurs estimate they may stand to lose more than £200 million of revenue in the period from the start of lockdown to June 2021.

The CCCF was set up on March 17 to support large credit-worthy companies affected by the pandemic. The Bank of England intends the scheme to be utilised as a way of assisting firms to bridge disruption to their cash flows.

It is only available to firms with an investment grade credit rating — the highest level of...

Seems like a sensible move to take advantage of the scheme if we need cash. But it's more debt to account for.

 

[StephenH]

That figure is about what we need to spend on our defense.

 

[AdamB]

Repayable in April-21. I guess that if we have a working capital facility, we'd be paying a lot more than 0.5% so we'll make an interest saving for the year

Makes sense to do

 

[inkpenspur]

That figure is about what we need to spend on our defence.

Bloody hell, what are we up in front of the beak for this time?

 

[StephenH]

Bloody hell, what are we up in front of the beak for this time?

Cruelty to a football squad?

#spellcheckbrickagain

 

[Glenda's Legs]

From the OS re the loan :

THS has met the criteria set by the Bank of England for the CCFF and has issued £175m of Commercial Paper through this facility.

The CCFF is designed to provide short-term loans at commercial rates during the pandemic and is available to companies that have a strong investment grade rating and make a material contribution to the British economy.

The global pandemic has created unprecedented economic and social challenges and the entertainment sector has been particularly affected. We are yet to see the full extent and duration of the economic impact. As of today, it is unclear when there will be a return to spectator-attended live events.

Due to the significance of income from matchday, conferencing and third party live events such as concerts and other sports, our estimated revenue loss, including broadcast rebates, may exceed £200m for the period to June, 2021.

The facility, which will not be used for player acquisitions, has been arranged to ensure we have financial flexibility and additional working capital during these challenging times. The Club has opened a multi-use venue designed to deliver diversified revenue streams and created jobs, homes and schools as part of the regeneration of our neighbourhood. We are ever-conscious of the responsibility we bear to ensure the future stability of our Club for all stakeholders and, in doing so, support our communities and our continued investment in the area.

Daniel Levy, Chairman: “We have always run this Club on a self-sustaining commercial basis. I said as early as 18 March that, in all my 20 years at the Club, there have been many hurdles along the way but none of this magnitude – the COVID-19 pandemic has shown itself to be the most serious of them all.

“It is imperative that we now all work together – scientists, technologists, the Government and the live events sector – to find a safe way to bring spectators back to sport and entertainment venues. Collectively we have the ability to support the development of new technologies to make this possible and to once again experience the passion of fans at live events.”

https://www.tottenhamhotspur.com/ne...-the-covid-corporate-financing-facility-ccff/

 

[JerusalemMan]

Wow, estimated £200m revenue loss up to next July due to the virus. Shows starkly how severe this is. A number of clubs won't be able to get this sort of money, even if they need it.

And the money borrowed is not for transfers either.
I'm glad we have this facility, and at a rate which will be lower than the rest of the debt we already have.

 

[ricky2tricky4city]

0.5%.......at those rates, silly not too.

It protects us.

and i dare say the BofE is happy to lend as we are sensibly and profitably run club (business)

conversely wonder how much the hammers may get?

 

[Bedfordspurs]

0.5%.......at those rates, silly not too.

It protects us.

and i dare say the BofE is happy to lend as we are sensibly and profitably run club (business)

conversely wonder how much the hammers may get?

They will only lend to companies of a certain rating
Hence why other clubs can’t borrow

 

[scaramanga]

Just borrowed £175m from the Bank of England

Can I come to your hookers and coke party?

 

[P.D.]

Makes sense, could pay off some higher interest debt with it in the short term - I'm sure Levy knows what he's doing.

 

[MKSpur]

Makes sense, could pay off some higher interest debt with it in the short term - I'm sure Levy knows what he's doing.

Yes I think there is some opportunism here - the figure quoted assumes no home games or events for the next season and a pay back of some tv and sponsorship money. If things do open up then we have cash at a very low rate.
Whilst we will be impacted more as our new ground was built to capitalise on attendance and additional revenue from other events I think any real football club would also be troubled by the of any crowd for a season. It’s just so fudging annoying that having a smaller or less attended ground and a reliance on a benefactor or prize money will work in some teams favour the longer attendance is not possible.

 

[ricky2tricky4city]

In simplistic terms............

We re-financed £637m of debt back in September, if the rate was 3% (think it was less than that and in bonds) that is approx £20m in interest per year

So even in the severest of hard times and if we theoretically bounce ourselves onto an interest only mortgage, the goverment loan will pay our mortgage for 8/9 years.

Thats some safety net that won't probably be needed, and if it isn't, as @MKSpur suggests, i think paying back some of our higher rate loans with the surplus makes perfect sense (if allowed?....i'm sure Levy will 'make it' allowed )

 

[ricky2tricky4city]

Its actually interesting to think that our debt is only a £20m burden every year.

Low interest rates.......in Spurs position....you gotta love'em

 

[ricky2tricky4city]

What i would add (and yes its unashamedly more praise for Levy) is that Levy and they way he runs the club and handles himself projects nothing else but we are a serious business and he is a seriously impressive and astute business man, and the recognition of that is, more than favourable finance terms and over subscribed bond issues (plus now the nod from the goverment) that ALL leads to keeping more money in the clubs coffers. Basically we look a sure bet.

 

[JerusalemMan]

Meanwhile, the chavs use their Russian money to cheatcode another player in.

 

[Baleforce]

Another Levy masterstroke, we'll end up owning the Bank of England and literally be able to print our own money.

 

[Finney Is Back]

In simplistic terms............

We re-financed £637m of debt back in September, if the rate was 3% (think it was less than that and in bonds) that is approx £20m in interest per year

So even in the severest of hard times and if we theoretically bounce ourselves onto an interest only mortgage, the goverment loan will pay our mortgage for 8/9 years.

Thats some safety net that won't probably be needed, and if it isn't, as @MKSpur suggests, i think paying back some of our higher rate loans with the surplus makes perfect sense (if allowed?....i'm sure Levy will 'make it' allowed )

I would be very surprised if the terms of the BoE loans allows them to be used for existing debt repayment. Generally these sorts of loans have purpose clauses (I would be astounded if these 0.5% loans did not). I think it was important for our existing debt to be refinanced first as we will not be allowed to use this loan to change the payment terms of our existing loans.

I would imagine £175 million is our shortfall of operational cash with an assumption that football is behind closed doors for the rest of this season and most of next season.

 

[Bedfordspurs]

I would be very surprised if the terms of the BoE loans allows them to be used for existing debt repayment. I would imagine £175 million is our shortfall of operational cash with an assumption that football is behind closed doors for the rest of this season and most of next season.

I agree
It comes with a lot of caveats

 

[Finney Is Back]

I agree
It comes with a lot of caveats

I think it's pretty simple really. The club needs this cash to stay alive.

If we look at things objectively. This season our gate income will drop by at least a quarter (less games played) and our CL income will drop significantly (round of 16 instead of finalists, lower allocation due to qualifying in 4th instead of 3rd and less money due to the new coefficient scaled payment) but our outgoings are increased compared to the previous season (transfer fees, wage bill and more debt). Factor that forward into next season and it could be 100% of the match day revenue gone, 100% of the CL money gone and equivalent costs due to still owing for our recent transfer and having the same level of wage bill.

Of course we'll have to pay this money back to the BoE in about 18 months' time. That will either mean adding that to our debt at commercial rates or significantly cutting costs and/or raising capital in the interim (player sales). Of course there is also the option of injected funds from the shareholders but with our owners that's about as likely as me buying a season ticket at Arsenal.