The New York Yankees expect to price a $1.2 billion stadium bond refunding in mid-October pending approval by a city agency, said a source close to the team.
Conduit issuer New York City Industrial Development Agency, which held a presentation hearing on Thursday, has scheduled a vote on the bond issuance for Sept. 20 at a public hearing at its headquarters on 110 William St. in lower Manhattan.
Holding company Yankee Stadium LLC, working through IDA and armed with its second upgrade from Moody's Investors Service in three months, intends to refinance roughly $943 million of Series 2006 bonds and $259 million of Series 2009A bonds. They funded construction of the third iteration of Yankee Stadium, which opened in 2009.
The baseball team makes debt payments in lieu of taxes – so-called Pilot payments – annually to the IDA.
Moody's, which since June has elevated its rating on the bonds two notches to Baa1 from Baa3, cited improved financial metrics expected from the debt-service savings, which could reach $10 million.
"Also, there is an increased liquidity cushion following the refunding, given the annual Pilot payments that Yankee Stadium LLC makes every Feb. 1 … remain the same, but the margin between the Pilots and the actual amount of debt service paid will increase after the planned refunding, according to the rating agency," Moody's said in its most recent upgrade Wednesday.
This increases the amount of cash IDA holds that is released to Yankee Stadium LLC each September to fund stadium operating and maintenance expenses, according to Moody's.
Moody's in June upgraded the Queens Ballpark LLC bonds issued to build New York Mets' Citi Field to Baa3.
The Yankees are the latest New York-area sports franchise to refinance bonds to take advantage of low interest rates. Last month, Mikhail Prokhorov, owner of the National Basketball Association's Brooklyn Nets and the Barclays Center in downtown Brooklyn, refinanced $482 million of arena debt, saving an estimated $90 million.
One public speaker at Thursday's IDA presentation hearing urged the agency to require some of the refunding savings to be used to help backstop the money-bleeding garages near the stadium.
"It's sort of the elephant in the room that nobody talks about here," said David Maisel of Chappaqua, N.Y.
Nonprofit Bronx Parking Development Co., a separate entity that operates five garages and five parking lots in the South Bronx near the New York Yankees ballpark, reported a
"It would seem to be incumbent upon this board to make it perhaps a requirement in the refinancing proposal that they use some of the savings to clean up the area and make that part of the Bronx a much more livable and rejuvenated area," said Maisel.
IDA board members declined to comment on Bronx Parking, saying Thursday's hearing was only for presentations.
Former Mayor Michael Bloomberg's administration created Bronx Parking, whose lots replaced parkland. 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.
Syd Mandelbaum, chief executive of the antipoverty think tank Rock and Wrap It Up, told the IDA board that the Yankees' community outreach and sustainability initiatives since 2003 includes the donation of 125,000 pounds of food prepared but not served.
"The Yankees have had, both on the micro and the macro level, the ability of changing local society," he said.
