Spurs reduce £23 million training ground loan
20 March 2019
The loan agreement was raised from £16 million to £25 million in 2015.
Spurs have also borrowed £637 million to build their new stadium.
Tottenham have reduced a £23 million loan arrangement with Investec Bank, which was used to help fund the club’s training ground and player accommodation lodge.
According to official documents posted at Companies House, Spurs and Investec agreed to “amend and restate” their loan arrangement on 28 February.
Club officials wouldn’t comment on the details of the amended loan, but confirmed to offthepitch.com that the amended loan “relates to the accommodation lodge and training centre.”
Sources close to the club said Spurs had paid back “a seven-figure sum”. The club also made a £2 million repayment last year.
Used to build training ground at Enfield
The latest payment suggests the club intend to pay back lump sums to the loan facility to reduce the interest and financing costs due on a quarterly basis.
The payment will have a positive impact on the club’s cash flow.
The Investec bank facility was initially set at £16million, but was amended and extended to £25 million in August 2015.
Tottenham’s 2017-18 accounts, stated: “Following a repayment of £2 million, £23 million is outstanding at the balance sheet and repayable over the period to December 2022. No further amounts can be drawn on this facility.
“The interest on this amount is paid quarterly and tracks the London Inter-Bank Offer Rate. The bank loan is shown in the financial statements net of £212,000 of associated loan arrangement costs, which are being amortised over the term of the loan.”
Is widely recognised as one of the best facilities in football
The loan was initially used to build the club’s training ground in Enfield, which was opened in 2012 and is widely recognised as one of the best facilities in football. It was also used to pay for the club’s new state-of-the-art, luxurious new player accommodation Lodge, which opened last summer.
The loan facility with Investec is a reminder of the financial juggling act of “risk and reward” the club is undertaking.
The original £16million Investec arrangement was classified as a short-term debt within the club accounts when it was originally taken out in March 2011. When it was increased to £25 million in August 2015, the repayment date was pushed out to 2022, becoming a long-term debt on the books and allowing the club more time to pay back the loan.
Facility was extended
The accounts also reveal the costs associated with the loan: “The interest on this amount is paid quarterly. The bank loan is shown in the financial statements net of £212,000 of associated loan arrangement costs, which are being amortised over the term of the loan.”
The distinction is important for debt service.
A bullet repayment reduces debt service requirements to interest only over the life of the loan, but presents a refinancing risk at loan maturity, while an amortising loan requires interest and principal repayments over the life of the loan.
Furthermore Spurs have borrowed £637 million to complete the building of their new stadium.
The club announced a £400 million arrangement with Bank of America Merrill Lynch, Goldman Sachs and HSBC on May 2017, which was due to last for five years.
This facility was extended to £637 million in October 2018 to cover the spiralling costs of their new stadium build.
The extra money was needed to cover any cash-flow issues as Tottenham worked to complete the construction.