An English soccer team tapped the booming US private placement market — Bank of America it's part of a growing sports trend

tottenham hotspur

  • English Premier League soccer club Tottenham Hotspur
    have refinanced the debt on their new stadium via the lucrative US
    private placement market and a loan with Bank of
    America. 
  • It’s a growing trend for major sports brands following
    similar moves into the bond market by European heavyweights
    Manchester United and Juventus.
  • Tottenham will see the maturities on their debt
    extended and the average interest rate fall in a successful move
    for the team. 

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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. 

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Source: FS – All – Economy – News
An English soccer team tapped the booming US private placement market — Bank of America it's part of a growing sports trend