Credit ratings

[LadyStanley]

Today, I've seen two articles issuing a "rating negative watch" of the credit rating for newer facilities: Pepsi Center and Staples Center.

This after hearing weeks ago that one credit reporting agency would consider lowering the organization's rating based on the status of the season.

http://denver.bizjournals.com/denver/stories/2005/03/07/daily3.html?jst=b_ln_hl

http://home.businesswire.com/portal...d=news_view&newsId=20050307005977&newsLang=en

Wonder how many (more) facilities/organizations will be added to the "watch" list. (And a what point one might consider them to be "junk" bonds, if ever.)

Click to read more...

 

[thinkwild]

Interesting links. I guess if the owners have to pay a higher interest charge, they will want to lower the amount of revenues the players can get. But some real costs seem to be coming for the owners. If the owners interest rates on his debt go up, does that come out of his pocket, or do players get less?

The L.A. Arena LLC is the obligor for all debt service payments. Security is derived from the following: the assigned revenue rights from the STAPLES Center's naming agreement with STAPLES Inc.; the 10 corporate founding-partner agreements; the two concessionaire agreements; the premier-seat revenues; the ticket-sales contract; and the license revenues of 101 of the STAPLES Center's 160 luxury suites.

Is this why the Kings have no hockey revenue? Their hockey revenues have been secured for debt repayments? 101 of 160 suites license fees are non-hockey revenue? I guess when the debt is paid off, the owners will be in a position again to give hockey players 75% of the revenues.