DALLAS -- The Dallas suburb of Frisco plans to issue $115 million of debt this month to build a headquarters and practice facility for the National Football League's Dallas Cowboys.
The issue will include $90 million of taxable certificates of obligation for the Cowboys training facility and $25 million of sales-tax supported revenue bonds for the headquarters, said Nell Lang, assistant city manager for the city.
In addition to that debt, Frisco expects to issue $22 million of general obligation bonds and $15 million of water and sewer revenue bonds, Lang said.
"Right now, we're looking at going to market the week of July 14 or 21," Lang said. "We're expecting our ratings by the end of the week."
The Frisco City Council approved the debt in an unusual Saturday meeting July 5. Lang said the odd timing arose because the council takes July off and the city wanted construction to begin immediately.
"If we had not held it then, we would have had to wait until Aug. 5," she said.
With an interest rate not to exceed 5.25%, the certificates will reach final maturity in 24 years.
"We've been running rate scenarios," Lang said. "Our scenarios are running about 4.4% or 4.5%. So, we've got a little bit of leeway."
David Medanich, vice chairman of First Southwest Co., is financial advisor.
The city and Frisco Independent School District each pledged $115 million for the project. The debt will be repaid with revenue from the city's tax increment finance zone.
The Frisco Community Development Corporation will fund $25 million of the project, and the Frisco Economic Development Corporation will invest $5 million. In the event that costs exceed the public commitment, a Cowboys affiliate corporation known as Blue Star will be responsible for those costs.
"We're ecstatic to take this next step of allowing the site to be prepared for construction, which is one of many steps in the process," said Frisco Mayor Maher Maso. "We're dedicated to building a world class, quality development that will benefit our residents, inspire our students and captivate visitors from everywhere."
Frisco expects a return on investments from retail outlets and Frisco ISD's use of the stadium for high school football games and other events.
"After months in the meeting room it will be great to see tangible signs of movement toward what we all know is going to be a world class project," said Stephen Jones, Cowboys chief operating officer and son of team owner Jerry Jones. "We share the excitement of the citizens and students of Frisco."
The Cowboys are planning the move to Frisco in fall 2016 from their current headquarters in Irving, the team's training home since 1985.
With a population of 140,220, Frisco was the fastest growing city in the United States in 2009.
The city has about $500 million of outstanding general obligation debt rated Aa1 by Moody's Investors Service and AA by Standard & Poor's. Outlooks are stable.
Frisco ISD has about $1.4 billion of debt with underlying ratings of Aa1 from Moody's, AA-plus from Standard & Poor's and AA-minus from Fitch Ratings. Voters approved $775 million of bonds on May 10 to build 14 schools.
