N.Y. Mets Stadium-Bond Outlook Cut by Moody’s on Suit
Bernard Madoff
Jin Lee/Bloomberg
Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC.
Bernard Madoff, founder of Bernard L. Madoff Investment Securities LLC. Photographer: Jin Lee/Bloomberg
Moody’s Investors Service lowered to negative its outlook on municipal bonds issued to finance the New York Mets baseball stadium because of a lawsuit against the team’s owners brought by the trustee for Bernard Madoff’s defunct firm.
The suit against team owner Sterling Equities Inc., headed by Mets Chairman Fred Wilpon, may hurt the club’s performance and attendance, Moody’s said in a statement today. It rates $695 million of bonds issued by New York City on behalf of Queens Ballpark Co. LLC at Ba1, the highest non-investment grade.
The Feb. 4 suit by Irving Picard seeks $1 billion of alleged phony profits from investments by Sterling in Madoff’s illegal Ponzi scheme. It claims Sterling ignored warnings from advisers of the fraud. Wilpon has said he’s looking to sell a minority stake in the team.
“The negative outlook acknowledges the close connection between the health and performance of the Mets baseball team and the long-term credit quality of the stadium project,” Moody’s said in a report.
The Mets sold tax-exempt bonds in 2006 and 2009 backed by payments in lieu of property taxes, lease revenue and installment payments to finance the construction of Citi Field. The team also issued debt backed by payments in lieu of taxes in 2009, the year the ballpark opened.
Last year, Moody’s lowered its rating on four series of bonds issued by New York City’s Industrial Development Agency on behalf of the team because of the “diminished credit quality” of Ambac Assurance Corp., which guaranteed the performance of the debt-service reserve fund.
Yesterday, a $600,000 block of Mets stadium bonds backed by payments in lieu of taxes with a 5 percent coupon and maturing in 2046 traded at 74.5 cents on the dollar to yield 6.952 percent, according to data compiled by Bloomberg. On Feb. 7, a $100,000 block of the same bonds traded at 73.9 cents on the dollar.
To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net Heather Burke at hburke2@bloomberg.net
To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net.
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