Star Citizen is in the news again for all the wrong reasons following disclosure of a recent loan. Multiple outlets are reporting developer Foundry 42, the subsidiary of Chris Roberts’ Cloud Imperium Games (CIG), is in financial distress and the crowd-funded game is owned by a British bank. However, a look at the actual details of the loan suggests that is not actually the case.

Outlets like Press Start and CGM recently posted articles claiming Star Citizen is now owned by a bank, and the developer is suffering from financial woes. This is based on a loan listed on Companies House, a United Kingdom-based registrar of companies used to share public records for companies in the country.

The listing reveals CIG took out a loan with British bank Coutts & Co. on June 15 and includes CIG property such as the games and assets it creates as collateral. This is what has caused the current furor with some claiming “CIG has put up all the assets for the game, including the source code and distribution rights for Star Citizen” and “they’ve had to offer up everything they own as collateral.”

Unfortunately, outlets and various individuals in social media and gaming forums aren’t looking into the 28-page loan form itself to see the details. To start, Coutts & Co. is a prestigious bank that only deals with high-end clients like entertainers, famous athletes, executives, and even the Royal Family. Clients are expected to have a significant amount of assets to use as collateral and Coutts is not the kind of bank that would hand out money with any reasonable risk.

Since CIG is a relatively new company that hasn’t produced anything yet, its gaming assets, office space, and equipment are all it has to offer as collateral.

Terms of how much the loan is for and what the interest rate was set at are missing from the document posted to Company House, so it is impossible to ascertain if this is a good or bad deal for CIG. Part of the reason to offer up collateral is to secure a low interest rate, which are at historic lows in England currently. The loan could be used simply to refinance an existing loan or to go with the old financial axiom of making other people’s money work for you.

The final bit of evidence showing the loan isn’t any particular danger comes at the end of page 18 of the loan document, under the title “Excluded Collateral.” This lists Star Citizen the game as excluded collateral, meaning it is not owned by the bank in the event of a default. It will just be everything in regards to the Foundry 42 studio in the UK, which is primarily working on the Squadron 42 spin-off game.

As it stands, Star Citizen does not appear to be at any more or less risk than it was before the loan news hit the internet. The game’s $150 million in crowd-funding has made it an easy target and CIG has had some stumbles along the way. However, Chris Roberts and the developers continue to provide weekly updates on progress of the game and recently revealed the Nox space bike along with updates on the development of the solar system. Meanwhile, the 3.0 alpha release is scheduled for early August.

Update: CIG posted the following statement in the official Star Citizen forums to clarify the loan. It should be abundantly clear now that the loan has nothing to do with the day-to-day operations of the game and is simply ownership attempting to manage the company’s money smartly. As mentioned above, the collateral does not include Star Citizen itself.

We have noticed the speculations created by a posting on the website of UK’s Company House with respect to Coutt’s security for our UK Tax Rebate advance, and we would like to provide you with the following insight to help prevent some of the misinformation we have seen. Our UK companies are entitled to a Government Game tax credit rebate which we earn every month on the Squadron 42 development. These rebates are payable by the UK Government in the fall of the next following year when we file our tax returns. Foundry 42 and its parent company Cloud Imperium Games UK Ltd. have elected to partner with Coutts, a highly regarded, very selective, and specialized UK banking institution, to obtain a regular advance against this rebate, which will allow us to avoid converting unnecessarily other currencies into GBP. We obviously incur a significant part of our expenditures in GBP while our collections are mostly in USD and EUR. Given today’s low interest rates versus the ongoing and uncertain currency fluctuations, this is simply a smart money management move, which we implemented upon recommendation of our financial advisors. The collateral granted in connection with this discounting loan is absolutely standard and pertains to our UK operation only, which develops Squadron 42. As a careful review of the security will show and contrary to some irresponsible and misleading reports, the collateral specifically excludes “Star Citizen.” The UK Government rebate entitlement, which is audited and certified by our outside auditors on a quarterly basis, is the prime collateral. Per standard procedure in banking, our UK companies of course stand behind the loan and guarantee repayment which, however, given the reliability of the discounted asset (a UK Government payment) is a formality and nothing else. This security does not affect our UK companies’ ownership and control of their assets. Obviously, the UK Government will not default on its rebate obligations which will be used for repayment, and even then the UK companies have ample assets to repay the loan, even in such an eventuality which is of course unthinkable. This should clarify the matter. Thank you.

[Featured Image by CIG]

[Edit: Clarified that the collateral only involves the work by Foundry 42, which does not include Star Citizen and corrected the 3.0 release date.]