Standard & Poor's late Tuesday raised its long-term rating and, where applicable, its underlying rating to BBB from BBB-minus on various Yankee Stadium LLC bonds, affecting $1.3 billion of New York City Industrial Development Agency debt.
Affected are the IDA's $942.6 million of Series 2006 payments-in-lieu-of-taxes, or PILOT, bonds; $259 million of Series 2009A PILOT bonds; $25 million of Series 2006 rental bonds; and $111.9 million of Series 2009 rental bonds.
Standard & Poor's similarly raised its long-term rating on StadCo owner Yankee Stadium Holdings LLC's $46.4 million bank loan. The rating agency also revised the outlook on all the bonds to stable from positive.
"The rating action reflects our view of a trend of strong operating and financial performance since the stadium opened in 2009," analyst Jodi Hecht said of the New York Yankees' 51,000-capacity home park.
Standard & Poor's cited sound cash flows, with a low break-even annual attendance of 2.75 million, and sound security for bondholders, including a non-relocation agreement. The stable outlook, it said, reflects its view of adequate revenue from contracted sources, strong and predictable financial performance, and a stable operating expense profile.
The bonds are unrelated to those issued for the struggling Yankee Stadium garage project. Bronx Parking Development Corp. is working out a restructuring of $238 million of debt related to parking garages built to serve the stadium.
A financial advisor for Bronx Parking in late June urged bondholders to take a haircut to help keep the company out of bankruptcy. Former New York City Mayor Rudolph Giuliani's law firm, Bracewell & Giuliani LLP, is representing those bondholders.
The IDA issued the tax-free, unrated and uninsured civic facility revenue bonds for the garages in 2007. Neither the city nor the IDA are on the hook for the bonds.
Bronx Parking, a subsidiary of Hudson, N.Y., nonprofit Community Initiatives Development Corp., is not affiliated with the baseball team.
