SBD/November 18, 2013/Facilities

Downgrade On KFC Yum! Center Bonds Could Put Refinancing On Hold

Moody’s cited AEG's role at the KFC Yum! Center as a positive
Louisville Metro Council President Jim King said that credit rating firm Moody’s Investors Service has "again downgraded the KFC Yum! Center’s bonds, putting on hold a potential refinancing for a lower interest rate that could save millions a year," according to Gregory Hall of the Louisville COURIER-JOURNAL. Citing "persistent risks to the arena’s ability to pay off" the $349M worth of bonds, Moody’s "downgraded its opinion of the Yum Center bonds to Ba3, pushing them deeper into 'junk' status." Moody’s said that existing agreements -- "namely the arena authority’s deal with the University of Louisville -- and scheduled increases in interest and principle payments will be a drag on profitability, even with improvements in the arena’s operations and a reconfiguration of a taxing district around it." King on Friday said that the authority’s finance committee, of which he is a member, had been "discussing trying to take advantage of low interest rates to save up to $7 million a year, but 'it’s a non-starter at this point.'” Kentucky Gov. Steve Beshear's Communications Dir Kerri Richardson said that any refinancing "would be years away regardless of the downgrade" (Louisville COURIER-JOURNAL, 11/16). In Louisville, John Karman III noted Moody's also cited "several positives for the authority, which owns and oversees the Yum Center, including the addition" of AEG as the arena's GM (BIZJOURNALS.com, 11/15).
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