In the latest installment of Muni Minute The Bond Buyer's 60-second video series that examines a top municipal market story that will impact the coming week we take a look at the $482 million bond offering from the Brooklyn Area Local Development Corp. that will refund debt sold in 2009 to build the Barclays Center. Investors looking for yield will find it in this lower investment-grade rated offering.
VOICEOVER: The low interest rate environment in the municipal bond market is offering tempting savings and high yields to those who seek them. This week, the Brooklyn Area Local Development Corporation is coming to market with $482 million of bonds to refinance debt issued in 2009 for the Barclays Center. That sale saw excellent demand, with the issue being four times oversubscribed and sporting a top yield of 6.48% in 2043. Goldman Sachs is expected to price the new PILOTs, or bonds backed by Payments In Lieu Of Taxes, in a tax-exempt and taxable refunding on Tuesday.
The arena has been generating strong cash flow according to the investor roadshow, with profits expected to be around $46 million this year. And refinancing the 2009 bonds could save up to $6 million a year. Buyers looking for yield will find it in this deal, which is rated Baa3 by Moody's and BBB-minus by S&P. The Barclays arena, which opened in 2012, is home to the NBA's Brooklyn Nets and the NHL's New York Islanders. I'm Chip Barnett. This has been the Muni Minute.