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March 18, 2009
FCE Press Release: Forest City Announces Extension of Credit Facility for NBA Nets
CLEVELAND, March 17 — Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) announced today that Brooklyn Basketball, LLC, in which the Company has an equity interest, has secured an extension of a $65 million credit facility related to the National Basketball Association (NBA) Nets professional basketball team. At closing, Brooklyn Basketball reduced the principal of the facility to $45 million through a $20 million add-on facility funded by a routine borrowing by the team under the NBA's League-wide Financing Facility.
The credit facility, through JPMorgan Chase Bank, N.A., has been extended to September 9, 2010, with a second extension available to June 9, 2011. The $20 million add-on is a combination of five-year and seven-year fixed-rate notes.
"This is another example of our companywide strategy of proactively managing debt maturities across the full range of our business interests," said Charles A. Ratner, Forest City president and chief executive officer. "As always, we appreciate the support of our lenders in this effort, and I congratulate our internal team that secured the extension."
NoLandGrab: "Lah-di-dah, we're just routinely borrowing more money to pay the Nets' bills. Nothing unusual here."
Forest City CEO Chuck Ratner would have us believe that this is just "another example of [Forest City's] companywide strategy of proactively managing debt maturities." But borrowing money to keep an NBA team operating (one that loses a lot of money) is hardly routine for a real estate development company. And neither is having to borrow a lot of money to help a dozen franchises routine for a professional sports league.
By the way, it comes as no surprise that the Nets were among the NBA's desperate dozen.
Posted by eric at March 18, 2009 10:21 AM