BRADENTON, Fla. — The Nashville Sports Authority joins a crowded field next week to price $65 million in revenue bonds to build a new downtown ballpark for the Sounds, an AAA minor league baseball affiliate of the Milwaukee Brewers.
Raymond James & Associates will be the book-runner for the negotiated deal selling Wednesday.
Bond proceeds will provide $37 million to construct the ballpark, $23 million to pay the state for building parking facilities, $5 million for capitalized interest during construction, and to pay issuance costs.
The debt will be sold as $54.9 million of tax exempt bonds and $10.1 million of taxable bonds secured by sales tax and tax increment finance revenues, $700,000 in team lease payments and a back-up pledge of non-tax revenues from the city.
The deal will be structured with 30-year, serial- and term-bonds to provide level debt service after an 18-to-24 month period of capitalized interest, according to Nashville Finance Director Rich Riebeling. The bonds are expected to have a 10-year optional call provision.
The City Council is expected to give its final approval to the transaction on Tuesday, while the sports authority will approve the deal Wednesday before pricing, Riebeling said.
Moody's Investors Service assigned an initial Aa2 rating to the bonds as well as a negative outlook, which reflects the negative outlook on Nashville's general obligation rating.
Standard & Poor's also was asked to rate the deal.
Since the transaction is relatively small and the credit is strong, Riebeling said the bonds will be sold in a single day.
The Sounds currently play in a 35-year-old, city-owned park several miles from the new site.
"We looked at upgrades but determined it is more feasible to build a new facility," said Riebeling, adding that discussions have been under way for at least a decade about a new AAA baseball park.
The project is part of a larger $150 million public-private partnership with the team and a private developer, which are building retail and residential developments adjacent to the ballpark.
The new stadium is being built on the edge of downtown Nashville in an area called Sulphur Dell where various minor league baseball games were played years ago.
Under terms of the lease between the city and the Sounds, the team will sign a 30-year lease starting when the new ballpark opens for the 2015 season and ending in 2045. The new facility will hold 10,000 people, and have 8,500 fixed seats.
Nashville will be responsible for major capital expenditures while the Sounds will operate and manage the ballpark and retain parking revenue.
The Sounds finished the 2013 season with 57 wins and 87 losses. The record enabled the team to finishing fourth in the PCL American Conference Northern Division.
However, it was the franchise's 14th-losing season in 36 years of competition and the worst record in team history, according to the team's website.
First Southwest Co. is financial Advisor.
The selling syndicate also includes Piper Jaffray & Co. and Loop Capital Markets LLC.
Bass, Berry & Sims is bond counsel. Charles E. Carpenter PC is underwriters' counsel.