In a slight surprise, news was spun up today that KSE is set to redeem two series of outstanding bonds.
What does this mean?
According to Swiss Ramble, this suggests that KSE is intending on covering the costs of some of Arsenal’s debts in the form of offering Arsenal a loan with more favorable terms. He makes special note that these loans do not cover all of Arsenal’s debt but do cover a ‘lion share’.
Why would they do this?
By doing this, Arsenal is able to free up some of the funds that were in their cash reserves but were designated and locked in to cover these debts. By freeing these up, it presumably allows Arsenal more freedom to use the funds how they want while reducing the interest they pay on loans.
Swiss Ramble notes that the terms of KSE’s loan to Arsenal have not been seen so much of the benefits are presumed, not official.
While understanding this spot is not my strongest skill, this gives off the feeling of an action that would be expected of any business owner with an investment struggling. However, if this prevents Arsenal from spending funds on debts that were dedicated for transfers OR frees some some extra funds in the short term for transfers, it is a positive action.
I will monitor the news to report any updates.