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Arsenal take out £120m loan

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  • Redhenry
    Redhenry Posts: 5,357
    edited January 2021
    Ryannair has lots of employees in the UK I guess
  • se9addick
    se9addick Posts: 32,033
    Redhenry said:
    120 m is peanuts to a prem club like them
    I mean it’s really not - their revenue was circa £400M last year so this loan represents over 25% of the value of their annual revenue. 
  • Redhenry
    Redhenry Posts: 5,357

    The Covid Corporate Financing Facility (CCFF)

    On March 17, HM Treasury announced a number of measures designed to support businesses. The Chancellor set out a package of temporary, timely and targeted measures to support public services, people and businesses through this period of disruption caused by Covid. This page is designed for businesses who wish to use one of the major measures announced: the joint HM Treasury and Bank of England lending facility, named the Covid Corporate Financing Facility (CCFF). The facility is designed to support liquidity among larger firms, helping them to bridge coronavirus disruption to their cash flows through the purchase of short-term debt in the form of commercial paper.

    At a summary level, to be eligible for the scheme, applicants currently need to:

    • Make a material UK contribution
    • Be investment grade rated (or equivalent) as at 1 March 2020 (as supplemented by the ongoing credit quality review described below)
    • Not be PRA- or FCA-regulated
    • Not be a public undertaking
    • Not be a leveraged investment vehicle
    • (NB: there is additional guidance for some specific types of entities – please see below for more details).
    • There is no requirement to have previously issued Commercial Paper (CP).
  • Redhenry
    Redhenry Posts: 5,357
    120m is roughly matchday revenue. Going forward 120m is not a lot, agree to disagree on that one
  • cafcfan1990
    cafcfan1990 Posts: 12,811
    Redhenry said:
    120m is roughly matchday revenue. Going forward 120m is not a lot, agree to disagree on that one
    It's not a lot generally speaking. But the club have lost significant revenue either way. 
  • jonseventyfive
    jonseventyfive Posts: 3,353
    Think I'll try that and head for mars. Not the chocolate version. 
  • PaddyP17
    PaddyP17 Posts: 13,035
    Not that I agree with the fundamental economic system/state of wealth inequality that underpins headlines like this, but... it makes sense, in the situation. Kroenke doesn't just have £120m in liquid cash floating around, easy to access on hand. The reality is that most of his wealth/worth is tied up in property or equity etc, so the actual cold hard cash that's probably needed right now is better off taken in the form of a loan now, and then repaid once Kroenke moves assets around or whatever.

    All that said, it is obscene that one person can do this, and that we live in a world where multi-billion pound sports entities can take out loans for £120m.
  • TelMc32
    TelMc32 Posts: 9,044
    Athletico Charlton said:
    MrOneLung said:
    paulie8290 said:
    JohnBoyUK said:
    Its a loan, not a handout and interest is being paid, allbeit at a more preferential rate than what would be commercially available.

    AFAIK, Spurs refinanced some of their debt from commercial loans and switched to what was available through the government and have saved a significant sum in interest in doing so.  Exactly like we all do when we remortgage our houses.
    But if you remortgage your home you dont then spend the money on a boat or a car(well most people dont anyway) they do it because they need the money

    But you can guarantee Arsenal spend money this January maybe not loads but they will spend money.


    And thats probably why they havent gone to the Premier League as CT suggested above there was probably some clause about if u take the premier league loan you cant sign players.
    Last time I remortgaged was because could get better rate. Same as what they are doing here 
    Not sure it is.  Are CCFF Papers allowed to be used to refinance existing commercial loans? 

    I don't know but suspect there are rules governing their use. 

    Govt money unlikely to be allowed to be used for risk transferance / cheaper debt costs or at least that would be limited I would imagine.  
    Clients have been using the CCFF scheme in addition to their existing bank debt and not instead of. There would be costs for exiting a bank facility and no guarantee they would get it back again and probably not at the same rate if they were able to (cost of capital is easing, but still more expensive than pre-pandemic). 

    What they could do is draw on the CCFF scheme instead of their bank lines as the former will be cheaper.  They’ll then have to pay non-utilisation fees on any term debt they have with the bank. 

    This isn’t an easy scheme to qualify for and there are a lot of restrictions and considerations that have to be considered.  No issue with any business taking advantage of it as they are paying for it and there are security guarantees for the Treasury.
  • ShootersHillGuru
    ShootersHillGuru Posts: 50,619
    PaddyP17 said:
    Not that I agree with the fundamental economic system/state of wealth inequality that underpins headlines like this, but... it makes sense, in the situation. Kroenke doesn't just have £120m in liquid cash floating around, easy to access on hand. The reality is that most of his wealth/worth is tied up in property or equity etc, so the actual cold hard cash that's probably needed right now is better off taken in the form of a loan now, and then repaid once Kroenke moves assets around or whatever.

    All that said, it is obscene that one person can do this, and that we live in a world where multi-billion pound sports entities can take out loans for £120m.
    Not sure what Kroenke is worth but it’s several billions I think. I find it hard to believe he doesn’t have £120 million in liquid funds. It sounds (and is) a lot of money but an average 4 bedroom house in Deptford is going to cost you £900k. For someone like Kroenke I would think it’s quite small change. Having to shift assets around to lay his hands on that much seems unlikely to me.
  • TelMc32
    TelMc32 Posts: 9,044
    ShootersHillGuru said:
    PaddyP17 said:
    Not that I agree with the fundamental economic system/state of wealth inequality that underpins headlines like this, but... it makes sense, in the situation. Kroenke doesn't just have £120m in liquid cash floating around, easy to access on hand. The reality is that most of his wealth/worth is tied up in property or equity etc, so the actual cold hard cash that's probably needed right now is better off taken in the form of a loan now, and then repaid once Kroenke moves assets around or whatever.

    All that said, it is obscene that one person can do this, and that we live in a world where multi-billion pound sports entities can take out loans for £120m.
    Not sure what Kroenke is worth but it’s several billions I think. I find it hard to believe he doesn’t have £120 million in liquid funds. It sounds (and is) a lot of money but an average 4 bedroom house in Deptford is going to cost you £900k. For someone like Kroenke I would think it’s quite small change. Having to shift assets around to lay his hands on that much seems unlikely to me.
    The likelihood is that any bank debt is guaranteed, which means that the CCFF benefits from the same. Kroenke will be on the hook one way or another & there will be restrictions on dividends/bonuses, for example, while they are in the scheme.
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  • eastterrace6168
    eastterrace6168 Posts: 22,492
    Redhenry said:
    120m is roughly matchday revenue. Going forward 120m is not a lot, agree to disagree on that one
    What a sad indictment of the game and the state that it is in, that we now think that a figure or £120m is a relative small one, and certainly shows that the premier league is in a world of it's own, while the rest of the game just withers and in some cases  sadly dies.
    As long as the fans are prepared to pay these inflated costs of season tickets to these clubs, then i can not see a change in the status quo.



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