March 28 (Bloomberg) -- Memphis has taken over ownership of minor-league baseball stadium AutoZone Park from Fundamental Advisors LP, an asset manager that gained control of the venue after a bond default four years ago.
Tennessee’s most-populous city issued about $24 million of debt last week through a local financing authority to fund the purchase of the park, home of the Memphis Redbirds. Major League Baseball’s St. Louis Cardinals acquired the Triple-A team as part of the agreement, according to a statement today from the 2013 National League champions.
The Memphis Redbirds Baseball Foundation had been operating the Redbirds and the park under a forbearance agreement with creditors since defaulting in 2010 on bonds sold to buy the team and build the facility. Fundamental that year bought $58 million of the debt at 42 cents on the dollar, becoming the sole bondholder, according to a company statement in November.
City council members had debated buying the ballpark, reaching an agreement in January after the plan was proposed the previous month. The municipality of about 655,000 residents will lease the stadium to the Redbirds, the release said.
The deal brings “long-term benefits for our great city, including stabilizing the future of the Redbirds and AutoZone Park,” Memphis Mayor A C Wharton Jr. said in today’s statement. “Through this transaction we will continue our successful revitalization of downtown.”
New York-based Fundamental, which focuses on distressed debt in the $3.7 trillion municipal market, has “worked hard to stabilize the financial condition of the team and maintain the stadium,” Laurence Gottlieb, the company’s chief executive officer, said in the statement.
Fundamental retired the defaulted bonds, issued through the Memphis Center City Revenue Finance Corporation, at the transaction’s closing. Jonathan Keehner, a spokesman for Fundamental, said the company declined to comment beyond the press release.
Phone messages left for Bobby White, the mayor’s chief of staff, and at the office of Treasurer Marie Kirk Owens, weren’t immediately returned.
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