The New York Yankees are seeking to become the latest professional sports club in the region to take advantage of record-low interest rates to lower borrowing costs by refinancing about $1 billion of bonds issued to build the team’s new stadium.
The refinancing by the Yankees, who are second-to-last place in their division, was disclosed in a public hearing notice from New York City’s Industrial Development Agency. Earlier this month, Mikhail Prokhorov, the Russian-born billionaire owner of the Brooklyn Nets and the Barclays Center, refinanced almost $500 million of the arena’s debt, saving $90 million.
The Yankees plan to refinance tax-exempt debt issued in 2006 and 2009 to build the 50,287-seat stadium, which opened in 2009. In June, Moody’s Investors Service raised the rating on the bonds to Baa2 from Baa3, the lowest investment grade, citing the “resiliency” of the arena’s revenue despite the team’s uneven performance and the economy’s ups and downs.
The Yankees rank second of 15 American League teams in attendance, according to Baseball-Reference.com, drawing about 39,000 fans per game.
The municipal debt is backed by payments in lieu of taxes paid by the Yankees to the city’s Industrial Development Agency, which owns the Bronx stadium and leases it to the team. The Industrial Development Agency plans a public hearing on the bond issue Sept. 15.
The new ballpark was designed to resemble the original 1923 Yankee Stadium before it was renovated in the 1970s, with a limestone-based exterior, arches and a roof-top frieze. The new stadium is across the street from the site of the old ballpark in the Bronx.
The New York Post report the refunding plan earlier, citing an unnamed person as saying the team wanted to save as much as $10 million a year in interest expense through the refinancing.