Moodys.com
Please Note
We brought you to this page based on your search query. If this isn't what you are looking for, you can continue to Search Results for ""
The maximum number of items you can export is 3,000. Please reduce your list by using the filtering tool to the left.
Close
Close
Email Research
Recipient email addresses will not be used in mailing lists or redistributed.
Recipient's
Email

Use semicolon to separate each address, limit to 20 addresses.
Enter the
characters you see
Close
Email Research
Thank you for your interest in sharing Moody's Research. You have reached the daily limit of Research email sharings.
Close
Thank you!
You have successfully sent the research.
Please note: some research requires a paid subscription in order to access.
Already a customer?
LOG IN
Don't want to see this again?
REGISTER
OR
Accept our Terms of Use to continue to Moodys.com:

PLEASE READ AND SCROLL DOWN!

 

By clicking “I AGREE” [at the end of this document], you indicate that you understand and intend these terms and conditions to be the legal equivalent of a signed, written contract and equally binding, and that you accept such terms and conditions as a condition of viewing any and all Moody’s inform​ation that becomes accessible to you [after clicking “I AGREE”] (the “Information”).   References herein to “Moody’s” include Moody’s Corporation, Inc. and each of its subsidiaries and affiliates.

 

Terms of One-Time Website Use

 

1.            Unless you have entered into an express written contract with Moody’s to the contrary, you agree that you have no right to use the Information in a commercial or public setting and no right to copy it, save it, print it, sell it, or publish or distribute any portion of it in any form.               

 

2.            You acknowledge and agree that Moody’s credit ratings: (i) are current opinions of the future relative creditworthiness of securities and address no other risk; and (ii) are not statements of current or historical fact or recommendations to purchase, hold or sell particular securities.  Moody’s credit ratings and publications are not intended for retail investors, and it would be reckless and inappropriate for retail investors to use Moody’s credit ratings and publications when making an investment decision.  No warranty, express or implied, as the accuracy, timeliness, completeness, merchantability or fitness for any particular purpose of any Moody’s credit rating is given or made by Moody’s in any form whatsoever.          

 

3.            To the extent permitted by law, Moody’s and its directors, officers, employees, representatives, licensors and suppliers disclaim liability for: (i) any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with use of the Information; and (ii) any direct or compensatory damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud or any other type of liability that by law cannot be excluded) on the part of Moody’s or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with use of the Information.

 

4.            You agree to read [and be bound by] the more detailed disclosures regarding Moody’s ratings and the limitations of Moody’s liability included in the Information.     

 

5.            You agree that any disputes relating to this agreement or your use of the Information, whether sounding in contract, tort, statute or otherwise, shall be governed by the laws of the State of New York and shall be subject to the exclusive jurisdiction of the courts of the State of New York located in the City and County of New York, Borough of Manhattan.​​​

I AGREE
Rating Action:

Moody's assigns Baa3 to Barclays Center Project Bonds

01 Dec 2009

New York, December 01, 2009 -- Moody's Investors Service has assigned a rating of Baa3 to the proposed issuance of $500 million of PILOT Revenue Bonds, Series 2009 (Barclays Center Project) by the Brooklyn Arena Local Development Corporation. The funds will be used to help finance the construction of the Barclays Center, an 18,000 seat capacity Arena to be built in Brooklyn, NY, which will be the home facility of the New Jersey Nets and will be used as a venue for other entertainment and sporting events. The outlook is stable.

The Brooklyn Events Center, LLC (ArenaCo) is a special purpose entity created to manage the construction, operations and maintenance of the Barclays Center (the Arena). The Brooklyn Arena Local Development Corporation (BALDCo) will lease the Arena from the Empire State Development Corporation (ESDC), which will be the fee owner of the Arena premises and the Arena. ArenaCo will sublease the Arena facility from BALDCo. ArenaCo will be obligated to make Payments in Lieu of Taxes (PILOTs) to BALDCo, which has agreed to remit the PILOT payments to the PILOT Trustee. The PILOT Trustee, which owes a fiduciary duty to collect PILOTs in full, will direct payments to bondholders via the PILOT Bond Trustee.

The rating reflects the security afforded by the PILOT bond structure, the strength of New York City as a media market, the non-relocation agreement, the Operating Support Agreement, the significant amount of existing contracted sponsorship support, the large equity component of the financing structure and the solid coverages that support debt service. The rating also considers the challenges presented by the relocation and the current weak financial condition of the Nets, construction risks (although the potential for cost overruns and delays have been largely mitigated by the Guaranteed Maximum Price, contingencies and schedule LDs built into the Design Build Contract) and the uncertain demand forecasts for premium seating, sponsorships, ticket sales and other sources of revenue for a new sports and entertainment venue of this kind.

The obligation to pay PILOTs is a contractual obligation of ArenaCo, and PILOTs do not reach bondholders through a traditional project finance structure. Rather, the obligation to pay PILOTs is secured by the contractual obligation to pay as well as the requirement that the PILOT Trustee, which controls the PILOT mortgage, foreclose on the Arena in the event of non-payment of PILOTs. In such a scenario, the current owners of ArenaCo (who are also owners of the Nets, the anchor tenant) would be dispossessed of the Arena.

The sources of revenues that will satisfy the obligation to pay PILOTs will be primarily earned from premium seating licenses and sales, sponsorship agreements, the naming rights agreement, Nets license fees, concession revenues, ticket revenue from non-basketball events, and green building and other ticketing fees. As an entertainment venue that distributes media content, the Arena's location in New York City, which is a major media market, is a credit strength. There is a population of approximately 8 million people in the New York City metropolitan area, which equates to 2 million per major league franchise, counting the NY Yankees, the NY Mets, the NY Knicks and the Nets. The strength of the media market is projected to result in demand for Nets basketball games and for other entertainment events, which in turn would drive the all important premium seating and sponsorship revenues. The financing structure also benefits from a 12-month cash funded debt service reserve and a 6-month strike reserve.

The rating also reflects the presence of a professional basketball team as the anchor tenant, which is a central factor to the successful sale of corporate suites and the attraction of sponsors. Corporations can entertain at professional sports events, and corporate sponsors are interested in not only the local exposure, but are also interested in the national exposure realized from appearing on national television during basketball games. Thus, Moody's believes the Arena will benefit from having the Nets as the anchor tenant in order to achieve the projected levels of revenue from premium seating and sponsorships.

While there is some execution risk in the relocation of the Nets from the current arena in New Jersey to the Barclays Center, in Moody's view the transformation and long-term commitment of the Nets to the new Arena should be achievable. There are three main elements, one fundamental and two structural, that work together to keep the Nets in the Arena through the term of the debt. First, the strength of the New York City media market provides strong economic incentives to both the Nets and ArenaCo to support the success of the project. The Nets are more likely to enter into a more profitable local television distribution deal in NYC than elsewhere. Therefore, there is little economic incentive for the team to relocate. Second, the Nets, along with the City of New York, BALDCo and ESDC have entered into a non-relocation agreement, the term of which matches the term of the debt. Third, as a protection against insolvency at the Nets, Mikhail Prohkorov will enter into an Operating Support Agreement with the NBA, whereby he will agree to be the primary obligor for operating expenses, including debt service, at New Jersey Basketball, the owner of the Nets franchise. Moody's believes that the three elements protect against the relocation of the franchise to a different geographic location for the term of the debt.

The financing structure of the Barclays Center Project has a substantial equity component of approximately $424.4 million (40%) of the approximate $1.06 billion in total funding sources. The funds are being contributed to the Barclays Center Project by New York City ($131 million) and the sponsors/developers, Forest City Enterprises Inc. and affiliates as well as Mikhail Prokhorov ($293.4 million), in the form of additional rent. The $131 million from New York City demonstrates strong municipal government support for this project.

In addition, the rating reflects solid cashflow coverages that support debt service. Under the base case, the project produces 10-year average debt service coverage ratios of 2.85x on the senior (PILOT) debt and 1.91x on a consolidated basis (senior plus subordinated debt). The coverages remain strong even under various downside attendance scenarios.

ArenaCo has already entered into sponsorship arrangements that will lead to considerable contracted revenue generation for the initial years of operation. The highest profile deal is the naming rights agreement with Barclays Capital that will generate substantial annual revenues for ArenaCo. Considering only the contracted revenue to date, the PILOT debt service coverage in the first full year of operations would be approximately 0.95x, and consolidated coverage would be 0.63x. Moody's notes that this level of contracted revenue has been achieved even before groundbreaking, and we expect that more sponsors will sign up once construction has commenced. Contracted revenue is defined as revenue generated from suites sales that have been executed or are currently in contract, sponsorships that have either been executed or are in contract negotiations, and minimum guaranteed annual rent paid by the Nets to ArenaCo.

It is anticipated that approximately $146 million of subordinated bonds will be issued by the parent entity Brooklyn Arena Holding Company LLC (HoldCo) to ArenaCo. The subordinated bonds are being issued by a separate legal entity and paid solely out of distributions made by ArenaCo to HoldCo. The HoldCo debt does not cross default to the PILOT bonds, has no acceleration rights and has limited remedies that do not interfere with the operations of ArenaCo.

The stable outlook is based upon the expectation that the Arena will be completed on time and within budget and the expectation that the ArenaCo will achieve projected revenues.

For further information on the transaction, a detailed Pre-Sale Report will be available on Moody's website in the near future.

The ratings are predicated upon final documentation in accordance with Moody's current understanding of the transaction and final debt sizing consistent with initially projected credit metrics.

Brooklyn Events Center's ratings were assigned by evaluating factors we believe are relevant to the credit profile of the issuer, such as i) the business risk and competitive position of the company versus others within its industry, ii) the capital structure and financial risk of the company, iii) the projected performance of the company over the near to intermediate term, and iv) management's track record and tolerance for risk. These attributes were compared against other issuers both within and outside of Brooklyn Events Center's core industry, and Brooklyn Events Center's ratings are believed to be comparable to those of other issuers of similar credit risk.

Brooklyn Events Center, LLC (ArenaCo) is a special purpose entity created to construct, lease, operate and maintain the new Arena and related parking facilities. The revenues of ArenaCo will be primarily derived from the premium seating licenses and sales, sponsorship agreements, the naming rights agreement, concessions, Nets license fees, ticket revenue from non-basketball events, and green building fees.

New York
Richard E. Donner
VP - Senior Credit Officer
Infrastructure Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

New York
Chee Mee Hu
Managing Director
Infrastructure Finance Group
Moody's Investors Service
JOURNALISTS: 212-553-0376
SUBSCRIBERS: 212-553-1653

Moody's assigns Baa3 to Barclays Center Project Bonds
No Related Data.
© 2020 Moody's Corporation, Moody's Investors Service, Inc., Moody's Analytics, Inc. and/or their licensors and affiliates (collectively, "MOODY'S"). All rights reserved.

CREDIT RATINGS ISSUED BY MOODY'S INVESTORS SERVICE, INC. AND/OR ITS CREDIT RATINGS AFFILIATES ARE MOODY'S CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND MATERIALS, PRODUCTS, SERVICES AND INFORMATION PUBLISHED BY MOODY'S (COLLECTIVELY, "PUBLICATIONS") MAY INCLUDE SUCH  CURRENT OPINIONS. MOODY'S INVESTORS SERVICE DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT OR IMPAIRMENT. SEE MOODY'S RATING SYMBOLS AND DEFINITIONS PUBLICATION FOR INFORMATION ON THE TYPES OF CONTRACTUAL FINANCIAL OBLIGATIONS ADDRESSED BY MOODY'S INVESTORS SERVICE CREDIT RATINGS. CREDIT RATINGS DO NOT ADDRESS ANY OTHER RISK, INCLUDING BUT NOT LIMITED TO: LIQUIDITY RISK, MARKET VALUE RISK, OR PRICE VOLATILITY. CREDIT RATINGS, NON-CREDIT ASSESSMENTS ("ASSESSMENTS"), AND  OTHER OPINIONS INCLUDED IN MOODY'S PUBLICATIONS ARE NOT STATEMENTS OF CURRENT OR HISTORICAL FACT. MOODY'S PUBLICATIONS MAY ALSO INCLUDE QUANTITATIVE MODEL-BASED ESTIMATES OF CREDIT RISK AND RELATED OPINIONS OR COMMENTARY PUBLISHED BY MOODY'S ANALYTICS, INC. AND/OR ITS AFFILIATES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS DO NOT CONSTITUTE OR PROVIDE INVESTMENT OR FINANCIAL ADVICE, AND MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS ARE NOT AND DO NOT PROVIDE RECOMMENDATIONS TO PURCHASE, SELL, OR HOLD PARTICULAR SECURITIES. MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND  PUBLICATIONS DO NOT COMMENT ON THE SUITABILITY OF AN INVESTMENT FOR ANY PARTICULAR INVESTOR. MOODY'S ISSUES ITS CREDIT RATINGS, ASSESSMENTS AND OTHER OPINIONS AND PUBLISHES  ITS PUBLICATIONS WITH THE EXPECTATION AND UNDERSTANDING THAT EACH INVESTOR WILL, WITH DUE CARE, MAKE ITS OWN STUDY AND EVALUATION OF EACH SECURITY THAT IS UNDER CONSIDERATION FOR PURCHASE, HOLDING, OR SALE.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS, AND PUBLICATIONS ARE NOT INTENDED FOR USE BY RETAIL INVESTORS AND IT WOULD BE RECKLESS AND INAPPROPRIATE FOR RETAIL INVESTORS TO USE MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS OR  PUBLICATIONS WHEN MAKING AN INVESTMENT DECISION. IF IN DOUBT YOU SHOULD CONTACT YOUR FINANCIAL OR OTHER PROFESSIONAL ADVISER.

ALL INFORMATION CONTAINED HEREIN IS PROTECTED BY LAW, INCLUDING BUT NOT LIMITED TO, COPYRIGHT LAW, AND NONE OF SUCH INFORMATION MAY BE COPIED OR OTHERWISE REPRODUCED, REPACKAGED, FURTHER TRANSMITTED, TRANSFERRED, DISSEMINATED, REDISTRIBUTED OR RESOLD, OR STORED FOR SUBSEQUENT USE FOR ANY SUCH PURPOSE, IN WHOLE OR IN PART, IN ANY FORM OR MANNER OR BY ANY MEANS WHATSOEVER, BY ANY PERSON WITHOUT MOODY'S PRIOR WRITTEN CONSENT.

MOODY'S CREDIT RATINGS, ASSESSMENTS, OTHER OPINIONS AND PUBLICATIONS ARE NOT INTENDED FOR USE BY ANY PERSON AS A BENCHMARK AS THAT TERM IS DEFINED FOR REGULATORY PURPOSES AND MUST NOT BE USED IN ANY WAY THAT COULD RESULT IN THEM BEING CONSIDERED A BENCHMARK.

All information contained herein is obtained by MOODY'S from sources believed by it to be accurate and reliable. Because of the possibility of human or mechanical error as well as other factors, however, all information contained herein is provided "AS IS" without warranty of any kind. MOODY'S adopts all necessary measures so that the information it uses in assigning a credit rating is of sufficient quality and from sources MOODY'S considers to be reliable including, when appropriate, independent third-party sources. However, MOODY'S is not an auditor and cannot in every instance independently verify or validate information received in the rating process or in preparing its Publications.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability to any person or entity for any indirect, special, consequential, or incidental losses or damages whatsoever arising from or in connection with the information contained herein or the use of or inability to use any such information, even if MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers is advised in advance of the possibility of such losses or damages, including but not limited to: (a) any loss of present or prospective profits or (b) any loss or damage arising where the relevant financial instrument is not the subject of a particular credit rating assigned by MOODY'S.

To the extent permitted by law, MOODY'S and its directors, officers, employees, agents, representatives, licensors and suppliers disclaim liability for any direct or compensatory losses or damages caused to any person or entity, including but not limited to by any negligence (but excluding fraud, willful misconduct or any other type of liability that, for the avoidance of doubt, by law cannot be excluded) on the part of, or any contingency within or beyond the control of, MOODY'S or any of its directors, officers, employees, agents, representatives, licensors or suppliers, arising from or in connection with the information contained herein or the use of or inability to use any such information.

NO WARRANTY, EXPRESS OR IMPLIED, AS TO THE ACCURACY, TIMELINESS, COMPLETENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OF ANY CREDIT RATING, ASSESSMENT, OTHER OPINION OR INFORMATION IS GIVEN OR MADE BY MOODY'S IN ANY FORM OR MANNER WHATSOEVER.

Moody's Investors Service, Inc., a wholly-owned credit rating agency subsidiary of Moody's Corporation ("MCO"), hereby discloses that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by Moody's Investors Service, Inc. have, prior to assignment of any credit rating, agreed to pay to Moody's Investors Service, Inc. for credit ratings opinions and services rendered by it fees ranging from $1,000 to approximately $2,700,000. MCO and Moody's investors Service also maintain policies and procedures to address the independence of Moody's Investors Service credit ratings and credit rating processes. Information regarding certain affiliations that may exist between directors of MCO and rated entities, and between entities who hold credit ratings from Moody's Investors Service and have also publicly reported to the SEC an ownership interest in MCO of more than 5%, is posted annually at www.moodys.com under the heading "Investor Relations — Corporate Governance — Director and Shareholder Affiliation Policy."

Additional terms for Australia only: Any publication into Australia of this document is pursuant to the Australian Financial Services License of MOODY'S affiliate, Moody's Investors Service Pty Limited ABN 61 003 399 657AFSL 336969 and/or Moody's Analytics Australia Pty Ltd ABN 94 105 136 972 AFSL 383569 (as applicable). This document is intended to be provided only to "wholesale clients" within the meaning of section 761G of the Corporations Act 2001. By continuing to access this document from within Australia, you represent to MOODY'S that you are, or are accessing the document as a representative of, a "wholesale client" and that neither you nor the entity you represent will directly or indirectly disseminate this document or its contents to "retail clients" within the meaning of section 761G of the Corporations Act 2001. MOODY'S credit rating is an opinion as to the creditworthiness of a debt obligation of the issuer, not on the equity securities of the issuer or any form of security that is available to retail investors.

Additional terms for Japan only: Moody's Japan K.K. ("MJKK") is a wholly-owned credit rating agency subsidiary of Moody's Group Japan G.K., which is wholly-owned by Moody's Overseas Holdings Inc., a wholly-owned subsidiary of MCO. Moody's SF Japan K.K. ("MSFJ") is a wholly-owned credit rating agency subsidiary of MJKK. MSFJ is not a Nationally Recognized Statistical Rating Organization ("NRSRO"). Therefore, credit ratings assigned by MSFJ are Non-NRSRO Credit Ratings. Non-NRSRO Credit Ratings are assigned by an entity that is not a NRSRO and, consequently, the rated obligation will not qualify for certain types of treatment under U.S. laws. MJKK and MSFJ are credit rating agencies registered with the Japan Financial Services Agency and their registration numbers are FSA Commissioner (Ratings) No. 2 and 3 respectively.

MJKK or MSFJ (as applicable) hereby disclose that most issuers of debt securities (including corporate and municipal bonds, debentures, notes and commercial paper) and preferred stock rated by MJKK or MSFJ (as applicable) have, prior to assignment of any credit rating, agreed to pay to MJKK or MSFJ (as applicable) for credit ratings opinions and services rendered by it fees ranging from JPY125,000 to approximately JPY250,000,000.

MJKK and MSFJ also maintain policies and procedures to address Japanese regulatory requirements.

​​​​​​​​
Moodys.com