Next week’s $343.3 million refunding by the Louisiana Stadium & Exposition District has been rated A by Fitch and A3 by Moody’s Investors Service.
The negotiated issuance, set for Jan. 15, includes a tax-exempt offering of $297.1 million and $46.2 million of taxable debt.
The debt is supported by a 4% hotel occupancy tax in Orleans and Jefferson parishes and other revenues. Debt service on the refunding bonds is estimated at around $24 million a year. The district’s hotel tax revenue totaled $37 million in fiscal 2012.
Fitch analyst Steve Murray said hotel tax collections fell 35% in fiscal 2006 due to hurricanes Katrina and Rita, but have posted annual increases averaging 9% since then. Revenues are up 13% so far in fiscal 2013, he said.
The state is also purchasing $50 million of the stadium district’s debt with a subordinate lien on the hotel tax revenues.
The district is a state entity that owns and operates the Mercedes Benz Superdome in New Orleans and the New Orleans Arena.
Proceeds will refund variable-rate bonds the district issued in March 2006 and terminate four floating-to-fixed rate swap agreements. If fixed-to-fixed swaps are included, termination fees would total $117 million.
Bank of America is book-running senior manager for the refunding. Underwriters also include Goldman, Sachs & Co., Morgan Stanley Raymond James | Morgan Keegan, and Dorsey and Co. Foley & Judell LLP is bond counsel for the district.
Public Financial Management Inc. is financial advisor.
