Spurs re-finance £400m of stadium debt to stabilize budget

Tottenham Hotspur Stadium, the crown jewel of north London, is a marvel that nobody can stop talking about. I hope one day to see it for myself, but the pictures and match day video are good enough for now.

One of the stories regarding the stadium once it was completed a few months ago was the amount of debt the club took on in order to complete the construction. We know the stadium cost is around £1bn total, but Spurs did pay for some of it right away. The remaining amount, as we now know thanks to Jack Pitt-Brooke of The Athletic, is being re-financed by the club to stabilize the long-term budget. The article is behind a paywall, but you can see the main part in the preview:

Spurs borrowed £637 million from Bank of America, Goldman Sachs and HSBC to pay for their £1 billion new stadium that opened in April. That bank facility was initially due to be paid back by April 2022.

But Bank of America has launched a new private placement scheme to turn roughly £400 million of that debt into bonds with staggered maturities ranging between 15 and 30 years. They reached out to institutional investors in the US with a conference call last week.

While this deal will not immediately decrease the level of Tottenham’s net debt, which is approaching £600 million, it will relieve the immediate pressure for Tottenham to pay the money back in less than three years’ time. The move also takes advantage of low interest rates in the US and puts the club’s finances on a stable long-term footing.

Spurs had a plan from the start with the stadium as Daniel Levy knew full well repaying £600m in three years was never going to happen. Stretching out two-thirds of the debt into a 15-30 year plan and having investors involved means that the club will be quite safe over a long period of time and can use the extra revenue earned from matches, NFL games and the the various concerts and events that the club plan to host at the stadium.

This is where Daniel Levy does not get enough credit. Yes, he was so locked into the stadium that last summer’s transfer window business was non-existent. The stadium required his almost full and undivided attention to ensure its completion, especially with the numerous delays that occurred along the way. To go through all of that and still stick to the plan to make sure Tottenham Hotspur Football Club did not go underwater and still have money to bring in the players they did this summer is truly impressive.

More on this will come out in time once investors get locked into this amount, and we still have to wait on Levy finding the proper sponsor for the stadium naming rights. Reports have said he is looking for an agreement in the neighborhood of £450m over the length of the deal. That money alone would be enough to handle the bulk of the payments on the refinancing.