DALLAS - Arlington, Tex., plans to price $60.7 million of special-tax revenue bonds early next week, completing the refinancing of $298 million of debt issued in variable-rate mode four years ago for a new Dallas Cowboys football stadium.

Last July, the City Council said it wanted to refinance most of the $325 million of debt that was issued to fund Arlington's share of the $1.1 billion stadium being built for the Cowboys after interest costs rose due to lowered ratings for its bond insurer.

Next week's refinancing leaves the city with no variable-rate debt.

Public Financial Management Inc. has been the financial adviser to the city throughout the entire process of debt issuance for the stadium. Vinson & Elkins LLP is bond counsel.

In late November, Arlington sold $112.2 million of special-tax refunding bonds through a negotiated sale led by JPMorgan and Banc of America Securities LLC. Yields ranged from 4.5% with a 5% coupon in 2017 to 5.73% with a 5.5% coupon in 2027. The bonds are insured by Berkshire Hathaway Assurance Corp. and callable in February 2018.

Next week's bonds were expected to carry ratings in the A category and a decision as to whether or not to buy insurance had not yet been made as of yesterday.

Arlington officials initially sought to fix out all the variable-rate stadium debt as soon as the City Council gave the go-ahead last summer, but market volatility has necessitated refunding the debt through several issues. Given current conditions, officials expect to achieve targeted interest rate levels.

"PFM thinks the bond market is loosening up and we should be able to refinance with a rate of less than 6%, which is our goal," Arlington finance manager Mike Finley said.

He said next week's issue will be negotiated using most of the same underwriting syndicate - including JPMorgan and Banc of America Securities - as in the previous refundings.

Estrada Hinojosa & Co. was a co-manager on those sales, but won't be next week as the city recently hired the Dallas-based firm to become its full-time financial adviser.

Finley said a final decision about bond insurance hasn't been made yet.

The Series 2005 bonds being refunded were sold in variable-rate mode and insured by MBIA Insurance Corp. When the insurer lost its triple-A rating last year, Arlington officials sought to convert all the debt to fixed rate. The city could have simply replaced the insurer on the bonds, but chose to convert it all to fixed rate despite the increased costs. Included in the costs was a swap-termination fee that was initially expected to be about $7 million, but ended up closer to $5 million, according to Finley.

Fitch Ratings has assigned an A rating to the Series 2009 refunding bonds due to the "sizeable reserves that should be more than sufficient to offset weakness in pledged revenue collection during the current recession," the agency said in a report.

Analysts also cited as credit strengths the satisfactory debt-service coverage projections and a 30-year lease agreement between Arlington and the Cowboys that commits the team to make annual rental payments to the city during that period.

The bonds are secured by various revenues, including a voter-approved 0.5% citywide sales tax, a 2% hotel occupancy tax, and a 5% car rental tax.

Standard & Poor's rates the special-tax bonds issued for the stadium at A and Moody's Investors Service rates the bonds at A2. Those agencies as of yesterday had not yet assigned ratings to the new issue.

Fitch said pledged revenue collections have weakened recently but should increase following the opening of the stadium in a few months and the start of the football season this fall.

The stadium, which will seat nearly 100,000 for football games, is slated to open June 6 with a concert by country music stars George Strait and Reba McEntire. Soccer games and a college football game are also scheduled to be played in the stadium prior to the first Cowboys home game in September. Super Bowl XLV will be played at the stadium in February 2011.

Additional revenue had been expected to come from development around the new facility, but that hasn't materialized yet due mostly to the national economic slowdown of the past 18 months.

The much-anticipated entertainment, retail, and residential complex known as Glorypark, to be located between the Texas Rangers ballpark and the new Cowboys stadium, was scrapped last May. Development of the 1.2-million-square-foot, mixed-use project was spearheaded by Texas Rangers owners Tom Hicks and Steiner + Associates, a Columbus, Ohio, developer.

Officials said last year that "the nation's economic markets have made it impossible to come to terms with lenders" for the half-billion dollar project. And the developer also wasn't able "to secure a firm and final commitment from an anchor department store," according to Hicks Holdings LLC.

Arlington, which sits nearly equidistant between Dallas and Fort Worth, is also improving right-of-way access around Interstate 30 in the northern part of the city, including a new overpass built specifically to address traffic needs of the new stadium. Last June, Arlington sold $34 million of combination tax and tax-increment reinvestment zone revenue certificates of obligation to upgrade infrastructure near the stadiums.

In November, area voters approved $140.8 million of bonds for roads and sidewalks, upgrades to fire stations, a new roof on the convention center, and other projects, some directly linked to the stadium and expected development in the area.

Fitch analyst Steve Murray said development of the area "would certainly contribute to the revenue stream."

"At some point something is going to happen around the stadium," he said. "We expect a fair amount of development will come. It's just a matter of when."

The Cowboys have also had trouble finding a corporate sponsor to attach its name to the new stadium. The debt issued for the facility also is secured through a portion of fees collected in conjunction with any naming rights agreement.

When construction began a few years ago, some thought the Cowboys would be able to secure a naming-rights deal worth hundreds of millions. But corporations have been reluctant to enter such an agreement as the financial climate has soured.

Major League Baseball's New York Yankees and Mets are set to open new ballparks shortly. Bank of America recently ended talks with the Yankees about a sponsorship deal that was purportedly worth $20 million a year. And Citigroup, which has received billions of federal bailout aid the past few months, has come under fire for the $400 million marketing deal it signed with the Mets a few years ago. The deal includes naming rights for the new ballpark, which is now called Citi Field.

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