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October 29, 2009
So Many Unchecked Approval Boxes: Why Any Sensible Bond Buyer Should Probably Steer Clear of Buying Atlantic Yards Nets Arena Bonds
Noticing New York notes a litany of reasons that investors may want to pass on the arena bonds for Bruce Ratner's eminent-domain-abusing public-subsidy-scarffing compound-modifier-consuming "Barclays Center."
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Pity the poor bond buyer who even thinks about buying bonds that might be offered on the market to finance the proposed Forest City Ratner Atlantic Yards Nets basketball arena. It is not your typical bond deal. Bond deals are usually really tight affairs, very “belt and suspenders.” We have never seen so many loose ends and approvals that are not in place. Many of those approvals may never be in place. Government officials may even try not to do what’s normally required. Do you remember when the subprime crisis resulted in underwater bonds across the commercial mortgage backed security industry? Everybody looked back in wonder and asked themselves how basic common sense requirements were ignored. The Atlantic Yards Nets arena bonds may be the municipal bond industry’s embodiment of the same kind of extreme folly: Basic standards of professional practices, dotting the i’s and crossing the t’s to protect the investor have simply been abandoned and one day everybody may wonder why.
NoLandGrab: Blogger Michael D.D. White may seem like another cranky Brooklynite who dislikes Bruce Ratner's Atlantic Yards overdevelopment, but he also "used to oversee the legal aspects of bond issuances for six agencies that were the state’s largest issuers of municipal bonds," so he knows WTF he's talking about.
Posted by lumi at October 29, 2009 6:20 AM