Taking advantage of record-low interest rates, the New York Yankees are lowering borrowing costs by refinancing $1B in bonds.
The tax-exempt debt was issued in 2006 and 2009 to build the 50,287-seat stadium. In June, Moody’s Investors Service raised the bonds’ rating, stating the stadium was able to bring in consistent revenue despite market volatility and the Bronx Bombers’ poor performance, Crain's reports.
Despite being in fourth place in the AL East, the Yanks currently rank second in the American League in attendance, with an average of 39,000 fans per game.
The refinancing was announced in a public hearing notice from NYC’s Industrial Development Agency, which owns the stadium, leases it to the team and receives payments to back the municipal debt in lieu of taxes.
The Yankees aren’t the first sports team to pull this move, as Russian billionaire Mikhail Prokhorov, who owns the Brooklyn Nets and the Barclays Center, refinanced $500M of the arena's debt, saving $90M. An anonymous source told the New York Post that the Yankees could save as much as $10M a year in interest expense with the refinancing.
The IDA will have a public hearing for the bond issue on Sept. 15. [Crain's]
