English Premier League soccer club Tottenham Hotspur may not have had much success on the field in terms of trophies in recent years, but off it, they've scored a top deal.
Last season's losing Champions League finalists have completed a multi-tranche refinancing of the long-term debt on the club's new Tottenham Hotspur Stadium. The £637 million ($795 million) deal comprises a $525 million private placement in the US market and a £112 million term loan from Bank of America. Tottenham's deal extends the club's debt maturities to an average of 23 years and lowers the interest rate paid across the debt to an average of 2.66%.
Tottenham moved to its new ground, one of the most expensive ever built, at approximately $1.2 billion in 2019 after a number of construction delays. The club plans to sell the naming rights to the ground.
It's part of a growing trend of major soccer clubs in Europe tapping US bond markets for funding, at competitive prices. Manchester United, England's most domestically successful club, placed a similar deal in 2015 while Italian giants Juventus placed a €175 million ($193 million) five-year bond in February this year, albeit without a credit rating.
Despite being a first time issuer in the US market, Tottenham secured favorable conditions for the private placement, attracting plenty of investor interest and managed to extend some debt maturities out to 30 years. Private placements allow issuers to access investors from the US insurance market and other institutionals interested in longer term, well-rated assets, and usually come with a lower interest rate as a result of the smaller risks associated.
Bank of America, which was lead placement agent on the deal, said it's part of a growing trend among sports franchises.
Tottenham have led the way in investing in best-in class facilities across their training facilities and stadium, a Bank of America debt capital markets financier involved in the deal told Business Insider. For the right brand, with the right credit profile, this is clearly a market that can offer long term financing to match a long term asset.
Bank of America's term loan was complimented by a revolving credit facility provided by HSBC. The club has an investment grade rating. Tottenham was advised on the financing by Rothschild & Co.
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, Daniel Levy, Chairman of the football club, said in a statement.