This year’s award for Bonds below £750m was hotly contested, with a number of strong nominations to choose from. Emerging as the winning transaction, however, was London-based English Premier League football club Tottenham Hotspur’s refinancing of its short-term stadium debt with a £637m multi-tranche, long-term financing structure.
The origins of the deal date back to 2015, when the club secured short-term bank debt for the construction of a new £1.1bn, 62,000-seat stadium, which opened in April 2019. Even before closing its original construction financing, the club had already turned its attention to future refinancing options. Last year this plan was realised in the form of a multi-tranche structure, which was completed on 19 September 2019.
To support this landmark transaction, Tottenham Hotspur achieved an investment-grade credit rating from two rating agencies. The deal itself was strikingly multifaceted, with multiple tranches and maturity periods.
As well as securing a £112m, 10-year term loan from Bank of America, the club also issued £525m of US private placement debt (USPP), including:
As such, the average maturity of the total debt package is 23 years, while the weighted average coupon is 2.66%.
There were numerous features that made this deal stand out from other potential winners. As well as being a flexible and attractively priced long-term financing structure, the deal was also compelling in the way it encapsulated Tottenham Hotspur’s core values, ‘to dare is to do’, while demonstrating a clear focus on thinking ahead, innovating and building relationships.
For example, rather than approaching investors with an information memorandum and then visiting them to present the opportunity, the club invited eight of the largest private placement investors to attend the fourth match in the new stadium in April 2019 – thereby showcasing both the new facilities and the club’s vision, as well as a 1-0 Spurs victory.
The enthusiasm generated by this innovative approach – which drew inspiration from the club’s approach to prospective player signings – meant that the process was significantly oversubscribed when it was formally launched in August 2019.
Likewise, given the long-term nature of private placement relationships, the club invested significant time and effort in building relationships with investors, with considerable care taken over every meeting, presentation and due-diligence response.
“It was exciting to see an innovative, complex, well-thought-through refinancing, aligned with the group’s creative values, which could not be more relevant to its strategy – to fund its most essential asset – the new Spurs stadium.”
Providers: Rothschild & Co acted as sole financial adviser; Bank of America acted as the lead placement agent and sole bookrunner, with HSBC acting as co-placement agent for the USPP
Structure: A £637m multi-tranche, long-term financing structure, including a £525m debut USPP issue and a £112m bank term loan
This article was taken from the October/November 2020 issue of The Treasurer magazine.