Interesting. Arsenal announce that they will redeem their fixed rate bonds, financed by a loan provided by KSE #AFC
What COULD this mean for #AFC?
Ideally KSE's loan will be at a lower rate of interest than the current bond (or even interest-free), so Arsenal's annual interest payments would fall.
Interest paid last year (in cash terms) in total was around £11m, while debt repayment was £9m.
Ideally KSE's loan will be at a lower rate of interest than the current bond (or even interest-free), so Arsenal's annual interest payments would fall.
Interest paid last year (in cash terms) in total was around £11m, while debt repayment was £9m.
Please note that the fixed rate bonds do not cover all of #AFC outstanding debt, but it does represent the lions's share.
Despite the penalties for early redemption, it makes sense to refinance at a time of record low interest rates.
Despite the penalties for early redemption, it makes sense to refinance at a time of record low interest rates.
This should also free up most of the cash that #AFC had to hold in the debt service reserve, which was £37m (for both fixed rate and floating rate bonds)
BUT... I should emphasise that we have not yet seen the terms of the KSE loan, so this is all speculative.
