Price of Arsenal Football Club Bonds Slumps

When Arsenal football club decided last summer to raise finance by using ticket receipts to issue bonds, it created a new fanbase for itself in the City of London. The deal was highly innovative in the world of sport finance. Better still, when bankers kicked the deal off, an army of financial institutions and retail investors gobbled up the £260m debt. However, the price of the Arsemal bond has slumped in London trading, because investors have realised that it could be adversely affected by fallout from the shakeout in global debt markets and the problems in the US subprime sector. The price swing has no effect on the football club itself, although a deteriorating bond price would make it more expensive for Arsenal to raise debt in the markets in the future. However, the club says that it does not have plans to sell any more bonds at present ‘given our healthy cash flow’.