Goldman Sachs to Underwrite Louisville Arena
Louisville, KY – Goldman Sachs, the nation’s top underwriter of sports facilities has been selected in that capacity for the new Louisville Arena project by the Louisville Arena Authority. Part of the firm’s selection was based upon its ability to structure a financing that could save $116 million in principal and interest over the 30-year life of the bonds, as well as a way to lock in interest rates ahead of the financing.
The New York brokerage firm has underwritten sports facilities including Yankee Stadium, Gillette Stadium which is home to the New England Patriots, and the Indianapolis Colts’ stadium. (The Yankee Stadium project is the largest stadium project in sports’ history.)
Goldman Sachs presented its financing plan to the full Louisville Arena Authority today at a special called meeting.
The head of Goldman Sachs’ sports facility financing, Greg Carey, said that because of today’s positive market climate, the total cost of the project is reduced by $116 million. The estimated debt service for the life of the project is $573.2 million, not $688.8 million as earlier projected. The cost of the project remains at $252 million with the bonds being issued reduced from $346.4 million to $339.3 million, after taking into account capitalized interest, costs of issuance and funding a debt service reserve fund. “This will be one of the most unique sports facility financings in the country. The financing benefits from the strong partnership that has been developed and offers bondholders a diverse security pledge of arena, state and local revenues.”
Louisville Arena Authority Chairman Jim Host said of the selection process that Goldman Sachs was the only firm interviewed to guarantee the rate on the bond issue through their accelerated bond purchase agreement. “This agreement is needed in order to lock in rates at today’s low market as opposed to not knowing where the market might go. This is a great day for this project.”
“When I envisioned this project, I knew there would need to be a strong spirit of cooperation between the private sector, the state and Metro Louisville in order to be successful”, said Governor Fletcher. “As a result of the partnership’s hard work, the expected cost of financing the Louisville Arena will be lowered by an estimated $116 million, when coupled with favorable interest rates."
“It’s a savvy, cost-saving decision by the Louisville Arena Authority,” said Louisville Mayor Jerry Abramson. “This makes a great investment in our economic future that much better.”
The arena will be funded through TIF’s (tax increment financing) from the state , Louisville Metro and committed arena-generated revenues.