Spurs £175mil Covid loan

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chunkylover53 said:
I’m not doubting it’s smart business sense.

I’m saying it’s mad that they can given it’s privately owned by a billionaire tax exile. See also, Branson.

And if the rate of interest is too good to be true, then yes the tax payer is funding it. That’s what funding is. And the rates are artificially low. That’s why they have taken it, rather than financing from a bank or other lender. Unless you think money grows on trees.

Given HM treasury have started to cap dividends and executive pay for companies that take it, they also think it’s tax payer funded.

It’s funded from the Treasury
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Care to check the bank of England's website - it states they do not receive any money from the treasury

www.bankofengland.co.uk

Who pays for the Bank of England?

Although we’re a public body, each year we give around £350 million back to the public through HM Treasury.
www.bankofengland.co.uk www.bankofengland.co.uk
 
Arcland said:
The treasury has a relationship with the Bank of England and can instruct it to do some things, such as raise the finance needed, but what you have just posted does not mean that tax revenue is moving from the treasury to the Bank of England
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“the joint HM Treasury and Bank of England lending facility”

apart from this bit.

I should have included the world “partially” in an earlier post
 
chunkylover53 said:
“the joint HM Treasury and Bank of England lending facility”

apart from this bit.

I should have included the world “partially” in an earlier post
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That statement simply means that the treasury has some control over it. It does not mean that money is being transferred from the treasury to the bank of England. Any money that the Bank of England lends it has to raise or create
 
Heard from someone today who is married to somebody at the BoE who knows a fair bit of the deal, that the loan was taken out, not by Spurs itself (the football club) but by the owners of Tottenham Hotspur Stadium. As far as I can make out, THS is owned by Spurs so how come they aren't the ones listed as having taken the loan out? Only think I can think of is that Spurs or Joe Lewis have set up a separate company to solely own THS and that company has taken the loan out.

Cam anybody else shed some light on this?
 
HeroHurley said:
Heard from someone today who is married to somebody at the BoE who knows a fair bit of the deal, that the loan was taken out, not by Spurs itself (the football club) but by the owners of Tottenham Hotspur Stadium. As far as I can make out, THS is owned by Spurs so how come they aren't the ones listed as having taken the loan out? Only think I can think of is that Spurs or Joe Lewis have set up a separate company to solely own THS and that company has taken the loan out.

Cam anybody else shed some light on this?
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It is indeed listed as the stadium owners on the BOE website.

I don’t think there is anything sinister about it at all.
 
HeroHurley said:
Heard from someone today who is married to somebody at the BoE who knows a fair bit of the deal, that the loan was taken out, not by Spurs itself (the football club) but by the owners of Tottenham Hotspur Stadium. As far as I can make out, THS is owned by Spurs so how come they aren't the ones listed as having taken the loan out? Only think I can think of is that Spurs or Joe Lewis have set up a separate company to solely own THS and that company has taken the loan out.

Cam anybody else shed some light on this?
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Your correct regarding the company which has taken the loan. Not sure on the rest

www.tottenhamhotspur.com

Tottenham Hotspur Stadium Ltd (“THS”) confirmed as eligible issuer for the Covid Corporate Financing Facility (“CCFF”) | Tottenham Hotspur

THS has met the criteria set by the Bank of England for the CCFF and has issued £175m of Commercial Paper through this facility.
www.tottenhamhotspur.com
 
chunkylover53 said:
It’s a moot point anyway. It’s still public funds.
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No it is not.

The Bank of England lends money that it has previously borrowed from Banks, wealthy individuals and sovereign wealth funds.

So if we need £300 billion for the coronavirus crisis, the treasury instructs the Bank of England to raise it.

The bank sells Gilts which are long term bonds or debentures to the market (not the taxpayer). To keep the maths simple, lets assume that all of the £300 billion in gilts are bought by one bank. That bank transfers £300 billion into the Bank of England and the Bank of England issues to them a Gilt certificate (usually irredeemable - meaning it never has to be paid back). The bank that bought it then receives an annual amount of interest each year at say 2% and this is paid by the bank of England each year unless it chooses to pay back the £300 billion, which it does not have to do.

So none of it comes from the taxpayer nor from the treasury, so I don't see how you think it is from public funds
 
Arcland said:
No it is not.

The Bank of England lends money that it has previously borrowed from Banks, wealthy individuals and sovereign wealth funds.

So if we need £300 billion for the coronavirus crisis, the treasury instructs the Bank of England to raise it.

The bank sells Gilts which are long term bonds or debentures to the market (not the taxpayer). To keep the maths simple, lets assume that all of the £300 billion in gilts are bought by one bank. That bank transfers £300 billion into the Bank of England and the Bank of England issues to them a Gilt certificate (usually irredeemable - meaning it never has to be paid back). The bank that bought it then receives an annual amount of interest each year at say 2% and this is paid by the bank of England each year unless it chooses to pay back the £300 billion, which it does not have to do.

So none of it comes from the taxpayer nor from the treasury, so I don't see how you think it is from public funds
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I know how central banks work and I think you are wilfully missing the point

given the treasury have stated they will cap executive pay and limit dividends, they also think so.
 
chunkylover53 said:
I know how central banks work and I think you are wilfully missing the point

given the treasury have stated they will cap executive pay and limit dividends, they also think so.
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Sorry I am totally at a loss as to what point I am missing - I thought your point was that the bank of England is funded by the taxpayer? was that not your point? If it was, I am pretty certain that I have disproved it.

As for you second sentence, the treasury "think what?"
 
HeroHurley said:
Heard from someone today who is married to somebody at the BoE who knows a fair bit of the deal, that the loan was taken out, not by Spurs itself (the football club) but by the owners of Tottenham Hotspur Stadium. As far as I can make out, THS is owned by Spurs so how come they aren't the ones listed as having taken the loan out? Only think I can think of is that Spurs or Joe Lewis have set up a separate company to solely own THS and that company has taken the loan out.

Cam anybody else shed some light on this?
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Yes you are correct mate, Spurs as in Joe Lewis set up another company in 2015 give or take a year, it was setup to allow the football club to be debt free during the initial building phase of the stadium project, and for other financial reasons that I can’t remember at the moment without looking it up.
 
Arcland said:
Sorry I am totally at a loss as to what point I am missing - I thought your point was that the bank of England is funded by the taxpayer? was that not your point? If it was, I am pretty certain that I have disproved it.

As for you second sentence, the treasury "think what?"
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The Treasury think that they are public funds, given they are placing restrictions on distributions.

Whether the Treasury funds the BOE directly is moot, and it is still a joint fund but hey ho, they are both public bodies. And reliant on the credit rating of the government to issue gilts.
 
chunkylover53 said:
It is indeed listed as the stadium owners on the BOE website.

I don’t think there is anything sinister about it at all.
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I'm not implying that there was anything sinister about it mate, it just confused me as to how Spurs (reportedly) are set to gain from having £175M loan (albeit not available to player transfers/wages whilst not being listed as the recipient of the loan. I can see Levy is part of the company who own THS but surely the company owing THS can't move that money from their accounts to the clubs accounts. It would surely have to go to the company which owns Spurs and then onto the football club and that does sound quite suspicious if that were to be allowed as surely clubs could set up separate organisations, pump money in to that, sell the stadium to that organisation and then transfer the money to the club accounts therefore potentially bypassing FFP records.

Didn't see your reply @EssexYid like I say I'm not implying that there's anything wrong with what's gone on. Just genuinely interested.
 
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HeroHurley said:
I'm not implying that there was anything sinister about it mate, it just confused me as to how Spurs (reportedly) are set to gain from having £175M loan (albeit not available to player transfers/wages whilst not being listed as the recipient of the loan. I can see Levy is part of the company who own THS but surely the company owing THS can't move that money from their accounts to the clubs accounts. It would surely have to go to the company which owns Spurs and then onto the football club and that does sound quite suspicious if that were to be allowed as surely clubs could set up separate organisations, pump money in to that, sell the stadium to that organisation and then transfer the money to the club accounts therefore potentially bypassing FFP records.
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Will be to finance the debt on the stadium, they will have put it in that entity

the FFP angle is interesting, but there is some sort of look through (hence City getting done)
 
chunkylover53 said:
The Treasury think that they are public funds, given they are placing restrictions on distributions.

Whether the Treasury funds the BOE directly is moot, and it is still a joint fund but hey ho, they are both public bodies. And reliant on the credit rating of the government to issue gilts.
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The treasury has the power to set the terms of the lending, that is true. However, that does not mean that the treasury are "funding" the lending.

It is a joint "scheme" as in the BoE funds it all and the Treasury acts in an advisory/management capacity - this still does not mean that the Treasury are "funding" anything. Having a legal oversight over a "fund" does not mean that you have "funded" it. So your description of it as a "joint fund" seems to make you believe the Treasury is funding it in some way.

People tend to think of the term "public funds" as monies raised through taxation held by the treasury.

When the bank of England raises these funds (to lend), they do not pay them to the treasury, the treasury does not hold them, even if they were temporarily paid to the Treasury they still cannot be thought of as public funds as they were not raised through taxation. The Treasury simply has control, not possession over these funds. It is good governance that the treasury has control but not possession. It's like the process of independent auditors auditing SAFC's accounts.

The only way that an arrangement like this could affect the taxpayer would be tax revenues needing to rise in the future to pay the interest on the Gilts. However, that does not apply in this case.
 
chunkylover53 said:
Will be to finance the debt on the stadium, they will have put it in that entity

the FFP angle is interesting, but there is some sort of look through (hence City getting done)
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I thought City got done for the Sponsors (which was basically the owners) pumping money in? On what basis can the owners of THS transfer the money onto Spurs books? Surely the upkeep/financing the debt on the stadium is directly the responsibility of THS (the company). It has no need to go onto Spurs books. Unless I'm understanding the whole thing wrong which I quite easily could be.
 
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