The New York City Industrial Development Agency board of directors on Tuesday unanimously approved the New York Yankees' stadium bond refunding of roughly $1 billion.
Proceeds from the so-called Pilot revenue bond sale, which conduit issuer IDA expects to hold in mid-October, will fund stadium operations and issuance costs, and pay increases by the baseball team to comply with the city's new living wage law.
The Yankees make debt payments in lieu of taxes – so-called Pilot payments – annually to the IDA for the city-owned stadium. IDA is a unit of the New York City Economic Development Corp.
About $254 million from the sale will go to a debt service reserve fund.
Goldman, Sachs & Co. is lead manager for the seven-member underwriting syndicate. Final maturity is 2049, with an expected coupon of 3% to 4%, according to EDC senior project manager Krishna Omolade.
Bonds issued in 2006 and 2009 financed the third version of Yankee Stadium in the South Bronx, which opened in 2009.
Moody's Investors Service twice in three months upgraded the bonds to Baa1 from Baa3. Moody's also upgraded the Queens Ballpark LLC bonds issued to build New York Mets' Citi Field to Baa3 in June.
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"It's a straightforward transaction," said board member Andrea Feirstein.
The bond sale will not affect Bronx Parking Development Co., a separate entity that operates five garages and five parking lots near the ballpark. Bronx Parking reported a $31 million net loss in calendar 2015, as fans have shunned the garage because of high parking rates and several mass transit options.
Bondholders have extended a forbearance agreement with Bronx Parking through the end of the year. Nuveen Asset Management holds about $140 million of the debt.
