Spurs refinance £400m of outstanding stadium debt
(Photo: Getty Images/Tottenham)

Spurs refinance £400m of outstanding stadium debt

The club are refinancing to allow for greater financial flexibility in the coming years.

Thomas Jobson

Tottenham Hotspur have agreed on a deal with a major creditor to refinance up to £400m of the debts accrued by the new stadium in a move that will allow the club more financial freedom.

The Athletic reports that one of the major loans taken out to fund the Tottenham Hotspur Stadium, from the Bank of America, is being refinanced through the use of bonds in the United States.

How will this work?

Instead of owing the money, in this case £637m, to the Bank of America itself; the club would owe £400m of that to private investors who would likely allow the club to repay the money over a longer period of time at a lower rate of interest.

The loan to the Bank of America was said to have a due repayment date of April 2022, but The Athletic reports that Spurs may be given between 15-20 years to repay these bonds under a new agreement.

Spurs will therefore only have to pay the bank in question £237m by 2022, with the bonds being used to pay £400m off at once which Spurs will repay over a longer time frame.

What does this mean for the club?

The main benefit of this new deal is that it offers Spurs more financial flexibility as it now has to find around £400m less than expected by 2022.

As of June 2018, the club had a net debt of £366m and the club confirmed that they were looking into the possibilities of converting some of their debt into bonds, hence this deal.

Whilst other debts are still expected to be settled by 2022 as of now, this agreement could pave the way for the club to use this method of refinancing to distribute its remaining debts over a longer period of time.

Whilst the debts would, therefore, be around for longer, the implications and limitations that they would place on the club would be reduced significantly; allowing for reinvestment in other areas of the club.