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Volume 20 No. 41


The U.S. Tennis Association is close to completing a $450 million bond sale that will fund the renovation of the USTA Billie Jean King National Tennis Center, including the long-awaited and much-debated roof over Arthur Ashe Stadium.

JPMorgan Chase and Bank of America Merrill Lynch, the USTA’s bankers, met with financial institutions in recent weeks, market sources said, and demand for the bonds outstripped the supply. That is hardly surprising given the revenue that spins off from the U.S. Open: Already approaching $300 million for the two-week event, that amount will rise significantly once the facility is revamped by 2018. The USTA owns and operates the Open.

The USTA declined to comment, as did JPMorgan Chase and Bank of America.

The price tag for the renovation is half a billion dollars and will completely remake the tennis center. For this year’s event, a new viewing platform by the

Photo (top) and rendering show the coming changes at the USTA Billie Jean King National Tennis Center.
Photo by: ROSSETTI (2)

practice courts will be in place, and drilling has already begun to install the pillars to hold up the Ashe stadium roof, which is slated to be ready in 2016.

After that year’s tourney, the center’s second stadium will be torn down and a new one erected, while the adjacent Grandstand court is relocated to the other side of the 42-acre facility.

The $450 million bond is cut into three tranches: a three-year bond, a 10-year bond and a 25-year bond, the market sources said. Cumulative annual interest costs will reach $30 million, though that is only about $5 million to $10 million more than current interest costs for the USTA. The group is retiring old debt as part of the transaction, and the rate the USTA is paying on the new debt is competitive.

In the 1990s, when the USTA last borrowed nine figures — to fund the construction of Ashe stadium — the organization did it through a government bond conduit so the debt would be tax-exempt. While that option is available today, the USTA chose taxable bonds because the rate differential with tax-exempt is not too great. Tax-exempt bond regulations also restrict the type of events the USTA could host at the tennis center. Opting for taxable bonds frees up the USTA to stage events that are not core to its mission of tennis.

The USTA plans to fund the remainder of the renovation out of reserves and free cash flow. There are no plans to issue seat licenses, with the consistent refrain from the USTA being that it will not finance the facility redo on the backs of ticket holders. The USTA also expects the renovation will not detract from its charge to grow the sport of tennis, with plans to increase spending in that regard for next year.