Gillette Stadium Developer NPS Sues Bond Insurer To Block Fees

Patriots team affiliate and Gillette Stadium developer NPS LLC has sued bond insurer Ambac Assurance Corp. "in a dispute similar to a raft of others in which institutional borrowers found that policies they took out didn't guarantee low interest rates after auction-rate markets froze up this spring," according to Ross Kerber of the BOSTON GLOBE. The suit "centers around a $252[M] bond issue that NPS sold to investors" in '06. The proceeds went to "pay off $282[M] worth of bonds that the team sold in 2000 to fund the construction of what is now Gillette Stadium." Kerber notes "on their own, the 2000 bonds were rated at BBB- by Standard & Poor's, a relatively low score indicating the issuer's credit would be considered risky, and forcing NPS to pay a higher interest rate." NPS has paid Ambac "about $19[M] since 2000, allowing the stadium securities to use Ambac's own AAA rating." The lawsuit states that the Patriots owner, the Kraft family, could have "owed an extra $44[M] a year in interest on money borrowed to build a new stadium." NPS reported that it "lost almost $6[M] during the upheaval over rate increases." Though NPS has "since refinanced its way out of that risk, it still faces $2.8[M] in fees to Ambac that it hopes to block with the suit" (BOSTON GLOBE, 7/16).