Jump to content

  • Sign up for free and receive a month's subscription

    You are viewing this page as a guest. That means you are either a member who has not logged in, or you have not yet registered with us. Signing up for an account only takes a minute and it means you will no longer see this annoying box! It will also allow you to get involved with our friendly(ish!) community and take part in the discussions on our forums. And because we're feeling generous, if you sign up for a free account we will give you a month's free trial access to our subscriber only content with no obligation to commit. Register an account and then send a private message to @dave u and he'll hook you up with a subscription.

*Shakes head* Everton again.

Fugitive

By Fugitive,
in FF - Football Forum

 Share

Recommended Posts

  • Replies 94.3k
  • Created
  • Last Reply

Top Posters In This Topic

  • Harry Squatter

    7511

  • AngryOfTuebrook

    5007

  • Anubis

    4394

  • Bjornebye

    3764

Popular Days

Top Posters In This Topic

Popular Days

Popular Posts

cloggypop
cloggypop
Shitty Arse
Shitty Arse

My dad died yesterday morning (he was 83 and had been ill). It’s very sad to see the utter hatred these cunts have now. Wall pushing gestures etc. My dad was a blue. He wouldn’t have condoned that sor

Angie81
Angie81

Okay guys I’ve shit out of full nude so this will have to do....

Posted Images

CWD82 Experienced

CWD82

Posted
Posted

The figures quoted suggest the council are making 2.5% per annum. However Everton will only pay interest on what they owe so initially they will pay 7 million in interest(whilst they owe 280 mil) but as the debt is repaid the interest payable will reduce unless it’s an interest only loan. Eg in yr 20 they would owe say 70 million, therefore 2.5% of 70 mil is 1.75 mil interest. Therefore the 7 million x 25 yrs profit for the council doesn’t ring true unless it’s interest only borrowing.

If the council agree a payment structure with their lender for a fixed monthly payment it can be capital and interest or repayment. Your payment is the same in month 1 as it is in month 100 with the interest amortising over the term. The payment is always the same. The council profit on the margin they charge Everton.

 

As an example, Everton can only secure private funds at 4%, the council at 2%. So the council obtain the funds and charge Everton 3%. Whether it’s cap and interest or int only makes no difference.

 

It won’t be interest only anyway as the council don’t have an asset to realise at the end of the term to repay the original loan amount.

 

The council can make on this and it’s quite obvious how. The question is should they be acting as a guarantor for a billionaire. If everything goes as plan it is a good deal for the council. It’s if it doesn’t people are questioning and rightly so

Link to comment
Share on other sites
devilsadvocate Enthusiast

devilsadvocate

Posted
Posted

If the council agree a payment structure with their lender for a fixed monthly payment it can be capital and interest or repayment. Your payment is the same in month 1 as it is in month 100 with the interest amortising over the term. The payment is always the same. The council profit on the margin they charge Everton.

As an example, Everton can only secure private funds at 4%, the council at 2%. So the council obtain the funds and charge Everton 3%. Whether it’s cap and interest or int only makes no difference.

It won’t be interest only anyway as the council don’t have an asset to realise at the end of the term to repay the original loan amount.

The council can make on this and it’s quite obvious how. The question is should they be acting as a guarantor for a billionaire. If everything goes as plan it is a good deal for the council. It’s if it doesn’t people are questioning and rightly so

 

I understand that the payment never changes on a repayment loan but the figure of 7 million quoted is purely the interest, the capital repayments would be added to that. On a 280 mil loan at a rate of 2.5% over 25 yrs the total payment would be approx 15 million per year and this would never change( assuming fixed rate of interest).

 

What would change is the amount of interest payable each yr. Initially of the 15 million about 7 million of this would be interest, rest paying back the debt. As the debt reduces more of the 15 million is repaying the debt and less is paying the interest. Therefore I don’t see how the figure of 175 million profit for the council is correct?

 

Any online mortgage calculator tells you that the 175 million interest would only be payable on an interest only loan. If it’s repayment the interest payable is less than 100 million. Surely Everton would only agree to pay interest on what they owe! At the end of the term the debt will be lower so the interest payable will be aswell. The echo article states that LCC will make 7 million in interest every yr for 25 yrs. Which makes up the 175 million profit quoted.

Link to comment
Share on other sites
devilsadvocate Enthusiast

devilsadvocate

Posted
Posted

I understand that the payment never changes on a repayment loan but the figure of 7 million quoted is purely the interest, the capital repayments would be added to that. On a 280 mil loan at a rate of 2.5% over 25 yrs the total payment would be approx 15 million per year and this would never change( assuming fixed rate of interest).

What would change is the amount of interest payable each yr. Initially of the 15 million about 7 million of this would be interest, rest paying back the debt. As the debt reduces more of the 15 million is repaying the debt and less is paying the interest. Therefore I don’t see how the figure of 175 million profit for the council is correct?

Any online mortgage calculator tells you that the 175 million interest would only be payable on an interest only loan. If it’s repayment the interest payable is less than 100 million. Surely Everton would only agree to pay interest on what they owe! At the end of the term the debt will be lower so the interest payable will be aswell. The echo article states that LCC will make 7 million in interest every yr for 25 yrs. Which makes up the 175 million profit quoted.

In fact to make 175 million profit LCC would have to charge Everton an additional 4.25% in interest on top of the rate the council are being charged. That still doesn’t answer why the figures Anderson/prentice state that it would be a consistent 7 million every yr in interest earned over 25yrs. On a repayment loan they would earn all the interest in the early yrs and it would reduce yr on yr as the debt gets repaid.

Link to comment
Share on other sites
CWD82 Experienced

CWD82

Posted
Posted

In fact to make 175 million profit LCC would have to charge Everton an additional 4.25% in interest on top of the rate the council are being charged. That still doesn’t answer why the figures Anderson/prentice state that it would be a consistent 7 million every yr in interest earned over 25yrs. On a repayment loan they would earn all the interest in the early yrs and it would reduce yr on yr as the debt gets repaid.

I don’t know the ins or outs but on first look I just assumed the council get the loan and pay say £750k a month back over 25 years. They then charge Everton £1.3m a month over 25 years.

 

They take the Everton money, pay the loan off then use the difference to invest in pies for Joe. Over 25 years the loan is paid off and Everton have paid the council £75m.

 

I don’t know enough about corporate financing to know if it’s that simple.

 

If you want my opinion, Everton could probably get the money for a similar rate to what they would get it off the council for. They’ve approached the council about the new stadium and the council have said, yes we’ll do what you need in terms of planning but you’ll pay us for the finance as we can get the money cheaper. The council wins, Everton pay the same (maybe slightly less) for the finance and get a supportive council to make the process easy.

 

It makes sense for the council.

 

I know a lot of Reds say why borrow that for them when theirs homeless in the street etc. Sad thing is borrowing money to give to homeless people doesn’t generate return. This does.

 

My concerns are what if the projected income from this pie in the sky blue wankathon don’t pan out? So many permutations. Theirs already talk about them needing more funding, is another private lender going to accept being second charge against a stadium that’s not built yet? If they do they’ll pay through the nose for that.

 

A lot could go wrong with it

Link to comment
Share on other sites
Sputnik1 Grand Master

Sputnik1

Posted
Posted

I am sure Anderson's only concern is getting his beloved Everton a nice new stadium so it can win trophies for them. I do not think for one second that he will benefit financially from this nor do I think he would mislead the good people of Liverpool into taking on a very risky debt if he wasn't sure it was the correct thing to do, for the city. 

Link to comment
Share on other sites
Marko121 Proficient

Marko121

Posted
Posted

Absolutely. First question I would ask is that if this is a no brainer why doesn't Evertons billionaire owner lend the club the money and himself pocket the interest whilst improving the value of his own asset.

It makes zero sense.

Why play with your own money when you can play with someone else’s?

 

It helps if you have a corrupt Mayor who has his own agenda of course

Link to comment
Share on other sites
Beno Collaborator

Beno

Posted
Posted

Its because Councils can borrow money far cheaper than commercial businesses. So he's doing them a favour and charging them for it. But I dont know if that charge means Everton pay more or less than if they borrowed themselves. It does mean, I should think though,that should things go tits up the risk falls on theCouncil to pay.

Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

×
 Share
Go to topic listing
×
×
  • Create New...