The New York Yankees aren’t done borrowing for their $1.34 billion stadium. The New York City Industrial Development Agency plans to privately place $111.9 million of taxable rental revenue bonds with an undisclosed investor or investors. Goldman, Sachs & Co. will underwrite the deal, which is expected to take place on July 15. The bonds will mature in 2029.
The issuer declined to release any information about the deal.
“As the issuer of the bonds, we are not permitted to disseminate any information about the placements,” IDA spokesman David Lombino said in an e-mail. “It’s a private placement, and the preliminary [offering statement] is confidential.”
Some details on the private transaction were made available in credit reports and the OS for the $259 million payment in lieu of taxes deal that priced earlier this year. The IDA sold $942.6 million of PILOT bonds and $25 million of taxable rental revenue bonds in 2006 for the new stadium opened that opened this year.
While the IDA declined to identify the bond counsel, Nixon Peabody LLP was bond counsel on the two previous Yankee Stadium bond deals. Calls to Nixon Peabody were not returned by press time.
The rental bonds are backed by rental payments that the obligor, Yankee Stadium LLC, pays to the IDA under a lease agreement. The borrower plans to use the proceeds from the privately placed bonds to refinance an outstanding bank loan that is “currently held at an entity outside” the corporation, according to a Moody’s Investors Service credit report.
The proceeds will also finance a debt service reserve fund for both the current deal and the previously issued rental revenue bonds as well as a capitalized interest fund and a reserve fund set aside in case of a baseball strike.
Moody’s rates all the bonds Baa3 with a stable outlook. Standard & Poor’s rates the bonds BBB-minus with stable outlook.