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December 1, 2009
Moody’s Rates Atlantic Yards PILOT Deal at Baa3
The Bond Buyer
by Ted Phillips
Bruce Ratner's Atlantic Yards arena bonds have been rated "a touch above junk" by Moody's.
Moody’s Investors Service rated the bonds for New York City’s controversial Atlantic Yards basketball arena at a notch above junk, according to a rating report released today. Moody’s assigned its Baa3 rating with stable outlook to the Brooklyn Arena Local Development Corp.’s offering of $500 million of bonds.
The issuer plans to sell the bonds, which are backed by payments in lieu of taxes, to partially finance the construction of the Barclays Center, a $1.06 billion, 18,000-seat complex that will be the future home of the New Jersey Nets National Basketball Association franchise.
The Moody’s report cited as credit positives the security of the PILOT bond structure, the strength of New York City as a media market, the non-relocation agreement with the Nets, an operating support agreement with Russian billionaire Mikhail Prokhorov, sponsorship agreements, and an equity structure that has $424.4 million invested in the arena.
Credit challenges include the weak financial position of the Nets, construction risks, and uncertain demand for the venue and sponsorships.
Posted by eric at December 1, 2009 3:23 PM