kse loan

KSE’s Arsenal loan – Everything You Need to Know

Arsenal’s owner Stan Kroenke has always been an infamous figure amongst the fans of the club and the wider footballing world. But news has recently broken that KSE (Kroenke Sports and Entertainment) have provided Arsenal with a loan for their fixed-rate bonds.

This brings up the questions, will this allow the club to spend in the transfer window? Is this due to the COVID-19 situation that the club finds itself in? If you want to know what this means for the Gunners in the grand scheme of things, read on…

Since Stan Kroenke bought the club, Arsenal basically became a private company. Therefore, their finances do not have transparency like they used to. But according to the statement itself, KSE is paying down the full £210m stadium debt which the club owed various companies and banks.

According to the fantastic SwissRamble, Interest paid last year (in cash terms) in total was around £11m, while debt repayment was £9m. While although the bonds do not pay off all of Arsenal’s debt, it does pay off a “considerable amount” going forward.

kse loan

What does this mean? It means that Arsenal will now no longer be required to hold over £30m of cash as a requirement of the old debt terms. Therefore the club now has the £30m to use for running costs.

But does this help the club in terms of transfers? In the long term it certainly does because now Arsenal are not bound by the term of the previous debt for the yearly payments. Which, after things normalize, the cash they’re saving here could potentially be used for transfers (this is speculation).

In the short term, KSE has probably provided Arsenal with the financial cushion that they needed to withstand the effects of the Coronavirus pandemic. Tim Payton of the AST (Arsenal Supporters’ Trust) has stated that Arsenal may suffer losses of up to well over 100m.

What does It mean for club’s debt? There are many things which are possible in the grand scheme of things:

  • Club could be a debt free entity
  • Club could extend its borrowing (its already in overdraft due to COVID)

We’ll just have to wait and see how things develop in regards to the ownership but the current information we have provides a positive outlook for the club as a whole.

So those expecting a huge transfer kitty to be available this summer may be disappointed. BUT, the financial strain of the virus will be eased on the club which may allow them to complete deals on better terms (regarding the debt the club owes KSE).

We’ll update you as more information becomes available.