[lit-ideas] Re: Translation Problem, or the Absolutely Literary Backstory to How at Deadline Arsenal Ended Up With Everton's Top Player
- From: David Ritchie <ritchierd@xxxxxxxxxxxxx>
- To: lit-ideas@xxxxxxxxxxxxx
- Date: Mon, 19 Sep 2011 23:02:10 -0700
Try this one:
The loan is a one-year facility for £14m, replacing a mortgage agreed with
Investec 12 months previously, in which this season's central funds were signed
over to the bank.
That Investec loan was a departure from the terms of the 2009 agreement with
Barclays, in which only the same season's Premier League funds were borrowed
against to assist with cashflow.
To sell future seasons' income is intrinsically more risky, both for the lender
and the mortgager. There can be no guarantees that Everton will even be in the
Premier League next season, and although there has been no disclosure of the
interest-rate terms, that risk is normally priced into what yield the creditor
must pay, making the rate more expensive.
Everton are insouciant about the deal, insisting that even if the worst happens
they could cover it from the bumper parachute payments from the Premier League.
But that income is meant as a relegation cushion, not to cover cashflow
difficulties.
David Ritchie,
Senior Bumper Parachuting Consultant,
Cashflow Difficulties-upon-Avon,
Ideas, ID.
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