(Reuters) - Major League Baseball’s New York Yankees team is seeking to sell $1.04 billion of tax-exempt revenue bonds to refinance debt it issued to build its new stadium in the Bronx.
Yankee Stadium LLC would save money in the current low-interest rate environment by refinancing about $1.2 billion of old outstanding debt issued in 2006 and 2009, when the stadium opened.
The Yankees built a new home and related parking garages that were controversial at the time because they took over public parkland just one block north of their old ballpark, built in 1923.
The stadium refinancing was contained in a notice of a Sept. 15 public hearing by the New York City Industrial Development Agency (NYCIDA), an arm of the city’s economic development corporation that acts as a conduit issuer for private firms to borrow on the tax-exempt municipal bond market.
The approximately 1.3 million square foot Yankees Stadium is owned by NYCIDA, subject to a long-term lease from the city of New York, but was built by the company.
The stadium debt was upgraded by Moody’s Investors Service in June by one notch to Baa2 with a stable outlook because of the stadium’s “proven resiliency through variable team performance and economic cycles.”
It also reduced market and interest rate risk after terminating “virtually all” of its derivative transactions, contributing to its upgrade. It initially had at least twelve floating-to-fixed interest rate swaps, bond documents show.
Another key credit strength is the team’s non-relocation agreement, which ties it to the new stadium, Moody’s said.
Reporting by Hilary Russ in New York; Editing by Alan Crosby