Arsenal Deny Financial Crisis

voldemort · 01-24-2008, 09:13 AM

Insurance company Ambac are currently recording devastating record losses as a credit crisis is continuing to affect many financial instutions across the globe.
Arsenal borrowed a sizeable £260 million from the company in July 2006 to fund much of the £400 million that went into constructing their state of the art Emirates' Stadium (pictured).
With the insurers now undergoing downgrading, there was an inherent risk that the charges on the bond could have shot up, potentially causing severe losses for the north London club.
However, in an astute move, Arsenal borrowed £210 million of the sum at a fixed rate for the next 25 years, and could afford to 'hedge' £40 million of the remaining £50 million until 2013 to protect against such wild market fluctuations.
This buys the Gunners a reasonable amount of time and spares them what could have potentially been an incredibly unfortunate financial crisis.

source:goal.com

01-24-2008, 09:13 AM	#1 (permalink)
voldemort Senior Member Join Date: Jan 2007 Posts: 9,158	Arsenal Deny Financial Crisis Insurance company Ambac are currently recording devastating record losses as a credit crisis is continuing to affect many financial instutions across the globe. Arsenal borrowed a sizeable £260 million from the company in July 2006 to fund much of the £400 million that went into constructing their state of the art Emirates' Stadium (pictured). With the insurers now undergoing downgrading, there was an inherent risk that the charges on the bond could have shot up, potentially causing severe losses for the north London club. However, in an astute move, Arsenal borrowed £210 million of the sum at a fixed rate for the next 25 years, and could afford to 'hedge' £40 million of the remaining £50 million until 2013 to protect against such wild market fluctuations. This buys the Gunners a reasonable amount of time and spares them what could have potentially been an incredibly unfortunate financial crisis. source:goal.com