(Bloomberg) -- Chelsea FC has raised £500 million ($612 million) of subordinated debt from US direct lending giant Ares Management Corp., according to people with knowledge of the situation.

The deal is structured as a so-called HoldCo payment-in-kind note, a type of financing that allows the borrower to pay interest with additional principal, and sits below other forms of debt in repayment priority. The financing will be at the holding company level, rather than the club itself.

A spokesperson for Ares declined to comment, while a representative for Chelsea didn’t respond to a request for comment. Bloomberg first reported that Chelsea was in talks with Ares in August.

The West London football club is controlled by a consortium of investors including Clearlake Capital and US investor Todd Boehly. The group paid £2.5 billion last year to acquire Chelsea from Russian oligarch Roman Abramovich, who had owned the team since 2003.

Since buying the club the new owners have spent more than £1 billion on players as they try to refashion the squad, focusing on younger talent and offering comparatively long contracts of up to eight and nine years. Still, the team has struggled to show improvement on the field. Last year was the team’s worst finish in 29 years.

Part of the new financing may be used to purchase the Oswald Stoll Mansions, a building close to Chelsea’s Stamford Bridge stadium. That would put the club in a better position to redevelop, a separate source familiar with the matter said.

Ares last year raised $3.7 billion to invest in sports, media and entertainment, more than twice the $1.5 billion originally targeted. The firm invests across the capital structure in both debt and equity.

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