Tottenham Hotspur Signs $897 Million Stadium Deal

[mawspurs]

Tottenham Hotspur Ltd. announced details of a 700 million-pound ($897 million) financing plan to fund a move into its new 61,500 seater stadium.

Read the full article at Bloomberg

 

[davidmatzdorf]

For me, the important take-away from that article is not the highly-enjoyable "the Premier League soccer club that’s clawed itself up to become one of England’s elite teams", it's this:

The club has already spent 340 million pounds on planning, building and the acquisition of land, according to the statement. The remaining cost of the project will be funded from the new facility and the resources of the club....

The 400 million-pound facility has a term of five years and is priced at libor plus 2.25 percent to 3 percent.

We've already funded 40%-45% of the total cost of the project, so we only have to borrow £400m to complete a £750m project. I've made a number of posts about the degree to which the NDP is already paid for, but I didn't think it was as high as £340m. I reckoned £250m max.

And the interest rate is very favourable, for a development facility. LIBOR for loans in sterling is presently sub-1% and doesn't look like it is going anywhere else too soon, so the effective current interest rate is 3%-4%. When I do appraisals for smaller developers, we assume short term development finance at 6%-7%.