May 13, 2010
Prokhorov filled arena financing gap not by buying bonds but offering a loan; he could end up owning 80% of arena operating company
Atlantic Yards Report
Well, Russian billionaire Mikhail Prokhorov, who as of yesterday owns 80% of the Nets, also filled the financing gap for arena construction, thus leading ratings agency Standard & Poor's (S&P) to affirm its investment grade (BBB-) rating on $511 million in tax-free bonds and removing them from the potential downgrade announced in March.
Prokhorov offered a $75.8 million loan rather than, as reported, buying $106 million in taxable bonds.
And Prokhorov--who put down $200 million for 80% of the Nets and 45% of the arena, and agreed to fund some $220 million in losses and debt--apparently drove a hard bargain with Forest City Ratner and Forest City Enterprises.
With relatively little additional cash, Prokhorov, according to a report issued yesterday by S&P, could end up owning 80% of Brooklyn Arena LLC (BALLC), the company operating the Barclays Center.
If so--and S&P didn't call it likely--that would mean that the government assistance and eminent domain for the Atlantic Yards arena, the first building in the project, would have benefited most directly Russia's second-richest man.
Had that been announced during the approval process, it surely would have generated much more concern.
Posted by eric at May 13, 2010 12:03 PM