BRADENTON, Fla. — The Atlanta City Council Monday approved issuing $145 million of new and refunding taxable bonds for Philips Arena, home to the National Basketball Association's Hawks and the Atlanta Thrashers, a National Hockey League expansion team.
New-money proceeds from the upcoming sale will be used to finance a variety of arena improvements, including replacement of a marquee, renovating restaurants and concession stands, replacing and upgrading the sound system, renovation of suites, converting the arena to a high-definition system, and work on heating, air conditioning, and lighting systems, according to Violet Travis Ricks, executive director of the Atlanta and Fulton County Recreation Authority.
The authority owns the arena and will issue the bonds. A sale date was not immediately available.
The refunding bonds will refinance some or all of the authority's $123 million of outstanding taxable Series 1997 bonds. The 1997 bonds were sold with a final maturity of 2028 and provided partial financing for the construction of the $213 million Philips Arena. The original bonds were rated Aa3 by Moody's Investors Service and AA by Standard & Poor's.
Both agencies are expected to rate the upcoming sale.
The City Council also approved a bond purchase agreement with underwriters that sets the maximum allowable interest rate on the bonds at 7%.
The bonds are expected to be sold with serial maturities between 2011 and 2028, according to city documents.
Goldman, Sachs & Co. will be the book-runner of the syndicate, which includes Raymond James & Associates Inc., Rice Financial Products Co., R.W. Baird & Co., and Sterne, Agee & Leach Inc.
Hunton & Williams LLC is bond counsel. Greenberg Traurig LLP and the Woodhouse Law Firm LLC are disclosure counsel. McKenna Long & Aldridge LLP and the Sparks Firm LLC are underwriters' counsel.
The multipurpose Philips Arena opened in September 1999. It has seating capacity of around 18,700 for hockey and basketball, and 21,000 for concerts. It is operated by Arena Operations LLC, whose parent company is Atlanta Spirit LLC — the owner of the Hawks and the Thrashers.