Tottenham Hotspur has today (Friday) confirmed a refinancing package for the £637m (€722.1m/$797.8m) in loans taken out to support the development of its new stadium, stating that it has secured one of the most attractive financing deals in sport.
News of the financial deal was first reported last month, but was confirmed by the English Premier League football club in a detailed statement today. The North London outfit borrowed £637m from Bank of America Merrill Lynch, Goldman Sachs and HSBC to help develop its £1bn stadium, which made a delayed debut in April.
That bank facility was due to be paid back by April 2022, potentially creating a significant financial challenge for Tottenham. However, the club has completed a private placement in the US this week, converting £525m of its debt into bonds, with staggered maturities of between 15 and 30 years.
A first-time issuer in the US Private Placement market, Spurs said its strong profile globally realised extensive support and oversubscription from a range of leading Private Placement investors actively supporting the sports sector. The average maturity of the total debt package of £637m is now 23 years and the interest rate, including the new bank facilities, is 2.66%.
The proceeds from the issue will be used to repay the short-term bank debt which was raised during the construction phase of the stadium from Bank of America Merrill Lynch, Goldman Sachs and HSBC.
In a statement, Tottenham chairman Daniel Levy said: “We have continued to develop Tottenham Hotspur in line with prudent financial management and investment into the club’s key infrastructure and our fast-growing global brand, successfully matching long-term assets with long-term financing.
“It is a tribute to the team on and off the pitch that we have achieved what is considered to be one of the most attractive financing deals in the world of sport. Our club is extremely well positioned as we move forward delivering the excitement and entertainment of Premier League and Champions League football, NFL, rugby, concerts and much more.”
Elliott McCabe, managing director in Bank of America Merrill Lynch’s Sports Finance & Advisory Group, added: “The management team of THFC continue to position the club for long term success by growing the brand through ongoing investment, particularly in relation to the iconic new stadium. This is reflected in the strong market reception met by Tottenham Hotspur as a first-time issuer in the Private Placement market.”
There have been fears amongst Tottenham’s fanbase that the club’s commitment to its new stadium would impact on its ability to compete against its rivals in the transfer market. In an interview with the Financial Times, Levy said the refinancing of the stadium debt, plus its ability to generate new revenue, would continue to grant Spurs a strong position in the European marketplace.
However, he added: “I understand, as I am a fan, clearly you want to win on the pitch. But we have been trying to look at this slightly differently, in that we want to make sure we ensure an infrastructure here to stand the test of time.
“We could have easily spent more money on players. Who knows if that would have bought us more success or not… the right approach is to build from the bottom up. There is no quick fix to becoming a much more significant global club.”
Tottenham Hotspur Stadium was designed to accommodate NFL American football games, with the first encounters at the venue set to see the Oakland Raiders take on the Chicago Bears and Tampa Bay Buccaneers face the Carolina Panthers on October 6 and October 13, respectively.
English Premiership rugby union club Saracens has also agreed a five-year deal to play an annual showpiece match at the stadium and Levy said he is keen to transform the venue into a “Madison Square Garden in London”.
He added: “Clearly, if you have a stadium of this magnitude and quality, to only have 25 to 30 games a year being played by Tottenham Hotspur, it’s not making use of the capital we have invested.”