There is NOTHING stopping them from proceeding, except the lack of will to do so. Seems pretty clear that CoG itself doesn't want this deal to go through.
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There is NOTHING stopping them from proceeding, except the lack of will to do so. Seems pretty clear that CoG itself doesn't want this deal to go through.
Evil Doctor
Cryin' Hank crying
I think the answer to all your questions and more is the CoG is hesitating because they are being asked to pay tens of millions in additional interest rate as a direct result of the GWI's threats of litigation. Simple.
I'll call it even sans the tea and veggie burger.
davemac1313
Registered User
Fidel Astro
Registered User
I agree. I think it's unfortunate that Coyotes fans are acting like the GWI is some kind of evil supervillain here, when they're really just some small special interest group that is good at making a public stink.
cbcwpg
Registered User
All I know is... if I was a Coyote's fan and found out later that weeks before the playoffs had started the team had already been sold to TNSE, but the NHL was just holding back telling anyone to soak the last few dollars out of the ticket buyers, I would be extremely PO'ed.
davemac1313
Registered User
http://www.azcentral.com/community/...le-city-council-districts-redrawn-census.html
GSC is right....everyone who is anyone is reading this forum, and lifting quotes and advice.
Now we have Manny Martinez taking Killion's 70's Oldie but Goodie and using it as his own....Hmmmm
Shenanigans...haven't heard it for 30 years til Killion used it to describe the actions of the COG.....now even the COG is using it....Got anymore great ole gems you can use Killion, and we can test this theory
GSC is right....everyone who is anyone is reading this forum, and lifting quotes and advice.
Now we have Manny Martinez taking Killion's 70's Oldie but Goodie and using it as his own....Hmmmm
Shenanigans...haven't heard it for 30 years til Killion used it to describe the actions of the COG.....now even the COG is using it....Got anymore great ole gems you can use Killion, and we can test this theory
You would almost think there is nothing to announce.
Couldn't be that, I imagine.
Mod: deleted.
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bacon25
Unenthusiastic User
I agree, and it would seem that the team is moving. If there has been no good news than their must obviously be bad news. Why would anyone keep good news from the fans in Pheonix? I could be way off on this but I give the Coyotes staying a slim chance.
While I do respect the opinion of people on the other side of the debate, please provide me with one cogent argument for why the GWI's actions have not directly increased the cost of bonding? Aside from the presumption the deal is illegal (presumed guilt simply is not part of our criminal or civil system), the precise strategy of the GWI has been to tamper with a deal without being put "to their proof".
You ask why people demonize the GWI. It is because of their tactics and because of their response of "its not our problem" when asked about the consequences of the Coyotes leaving. No one would deny them their right to file suit to enjoin the sale, but instead they appear content to have the bonds be sold at an unnecessarily high interest rate, and then play a version of Russian roulette with the taxpayer money on whether their opinion on the legality of the transaction is correct. Many people are quick to ask what if the deal is illegal? Few people are willing to ask, what if the deal is perfectly legal?
In passing, I would point out the GWI lost today again in court on their position against alternative energy. They fought solar energy in Arizona. Nuff said.
Well, why doesn't the city get a declaratory judgement?While I do respect the opinion of people on the other side of the debate, please provide me with one cogent argument for why the GWI's actions have not directly increased the cost of bonding? Aside from the presumption the deal is illegal (presumed guilt simply is not part of our criminal or civil system), the precise strategy of the GWI has been to tamper with a deal without being put "to their proof".
You ask why people demonize the GWI. It is because of their tactics and because of their response of "its not our problem" when asked about the consequences of the Coyotes leaving. No one would deny them their right to file suit to enjoin the sale, but instead they appear content to have the bonds be sold at an unnecessarily high interest rate, and then play a version of Russian roulette with the taxpayer money on whether their opinion on the legality of the transaction is correct. Many people are quick to ask what if the deal is illegal? Few people are willing to ask, what if the deal is perfectly legal?
In passing, I would point out the GWI lost today again in court on their position against alternative energy. They fought solar energy in Arizona. Nuff said.
Gump Hasek
Spleen Merchant
I can provide you with a cogent argument. Bond rates are a reflection of the risk of the underlying product. Given that most muni bond sales are done by issuers who are using the proceeds to straight-up fund either the building or maintenance of city owned infrastructure, and that this particular issue may (or may not) involve a city raising one hundred million plus dollars to be directly forwarded to a private individual in exchange for an asset the city has already once paid for via bond issuance, and that the bond is to be issued by a city that has already pledged its tax backing against other similar bonds, and that the issuing city has a much higher debt rate relative to the mean, as such it can be argued that the deal is exceedingly risky relative to the normal - plain vanilla muni offering, ex-GWI involvement.
I can only ask you since when is it customary for a duly elected body to go to court to bless their decision? Let's discuss the seperation of powers issue to begin with.
More to the point, I think the GWI sandbagged the City. The GWI did not refute the mayor's recent statements that in January of 2011, the GWI claimed that they understood the transaction and needed nothing further from the City (including any additional documents they like to complain about). Then, without telling the City, they sent notices to the City's banks and potential investors claiming the deal was illegal and misstating the Turken test.
Should the City have filed a DJ in February? Perhaps, but as someone who actually prosecutes and defends DJs, I can tell you the earliest they would get a ruling would be the fall. Cold comfort at that point.
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GWI had hung around through this entire ordeal, to expect them to lay down would have been incredibly naive on the COG's part. And they're paying for it now by leaving this deal to the last minute.
I calll Bull**** on that. Even the underwriters have said the GWI's threats of litigation caused a basic A1 rated city to have to sell their bonds at corporate bond rates. Nice try.
No argument from me on that, but it really isn't responsive to the point I was making.
Gump Hasek
Spleen Merchant
Where have the underwriters stated that? Link please. Are you calling BS on my remark that bond rates reflect the risk of the underlying deal, or that this deal is riskier relative to the normal vanilla muni issuance? Because IMO the deal is well outside of the normal vanilla muni issue, and as such deserves a higher rate. A base understanding of bond rates dictates that rates increase relative to deal risk.
They may have stated that the potential for litigation increases risk, but that potential exists because of the structure of the underlying deal, not simply because GWI is seen as intransigent. That it is possibly against the State constitution might direct you to some of the inherent deal risk.
Blue Shakehead
because lol Jets
I don't claim to know what effect GWI's actions have had directly or indirectly on the interest rate, nobody does. I agree that their actions have been detrimental to the selling of the bonds. However, its a bit of a leap to suggest that the bonds would have definitely sold, were it not for GWI - especially when you consider:
1. The municipal bond market is on an 11 year low, with little supply and even less demand. This makes for an opportune time for investors to seek higher-yield returns on virtually all muni-bonds and no need for them to take on riskier bonds.
2. The City of Glendale's bond rating was downgraded by Moody's and is currently on a credit watch list from the other rating agencies. The City of Glendale currently has $1 billion in sports-related debt and has pledged sales tax revenues to a number of bonds - including these. Their sales tax revenues have been considerably lower than their own projections.
3. The sale of the bonds means investors need to have confidence with:
a) the revenue projections from parking for which there is no historical benchmark, and thus rely heavily on studies from consultants, one of whom is being charged with fraud for inflating projected stadium revenues for other ventures; and
b) the viability, and by definition long-term profitability of the Coyotes fresh from bankruptcy whose best financial year was "only" losing $6 million and regularly post losses in the $25-40 million range (not even accouting for fixed costs which push the losses even higher) and are expected to turn around the team with a "few minor tweaks".
You ask why people demonize the GWI. It is because of their tactics and because of their response of "its not our problem" when asked about the consequences of the Coyotes leaving. No one would deny them their right to file suit to enjoin the sale, but instead they appear content to have the bonds be sold at an unnecessarily high interest rate, and then play a version of Russian roulette with the taxpayer money on whether their opinion on the legality of the transaction is correct. Many people are quick to ask what if the deal is illegal? Few people are willing to ask, what if the deal is perfectly legal?
In passing, I would point out the GWI lost today again in court on their position against alternative energy. They fought solar energy in Arizona. Nuff said.
The fact that they are fighting school boards, police departments, state and local governments and public utilities agencies should suggest that their opposition to the Coyotes sale is not based on a partisan hatred of the Coyotes. I don't think they are "content" to have the bonds be sold at a higher rate - their objective is to prevent the use of public money to facilitate the sale of the Coyotes. There are plenty of alternatives that would alleviate their concerns - one of them is the NHL lowering their price to market value (which MH believes is $70 million); the other is for MH to find private financing - which happens everyday in the marketplace.
The NHL, who've already leveraged $25 million from the CoG on a threat of relocation, is essentially asking the City to make up the difference between the FMV and their investment in the team. If they aren't prepared to endure losses to keep the Coyotes in Glendale (in the same way that the TB owners ate $100 million to sell to a local buyer) then they can reasonably be called hypocritical and greedy. They certainly aren't the white knight in this scenario.
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Bettman's statements reflect what I said. As have the statements of the CoG. Fair question and I'll try to find a link.
The single factor of risk here increasing the interest rate is not the ability of the CoG to repay the bonds, as would be the typical question. It is the GWI's continued threats to litigate the legality of the underlying transaction and sale of the bonds. As compared with other "vanilla" deals, the market is reflecting the risk of litigation which is the only unique factor here in terms of risk, and one intentionally created by the GWI.
If what you mean to say is the market has determined on its own, without the GWI's involvment and nearly daily appearances on radio, television and the press, that the transaction is unconstitutional, I will submit that is a possibility. As it is possible for a monkey to fly out of my rear end.
All things are possible. Remote would be gracious here.I just think it's part and parcel of the mindset the COG should have been in. If GWI "sandbagged" the COG it didn't take much to torpedo the deal. Why they weren't operating from the well founded assumption that whatever deal they came up with GWI was not going to be a fan I'll never know.
Gump Hasek
Spleen Merchant
Bettman's statements reflect what I said. As have the statements of the CoG. Fair question and I'll try to find a link.
The single factor of risk here increasing the interest rate is not the ability of the CoG to repay the bonds, as would be the typical question. It is the GWI's continued threats to litigate the legality of the underlying transaction and sale of the bonds. As compared with other "vanilla" deals, the market is reflecting the risk of litigation which is the only unique factor here in terms of risk, and one intentionally created by the GWI.
If what you mean to say is the market has determined on its own, without the GWI's involvment and nearly daily appearances on radio, television and the press, that the transaction is unconstitutional, I will submit that is a possibility. As it is possible for a monkey to fly out of my rear end.
A large part of my job as a trader is to assess risk and to put money to use accordingly; virtually any bond trader would tell you IMO that a deal as I've described in my initial post versus a similar sized offering to be used to fund sewers (for example) deserves a higher rate. The increased risk here is that the issuer has a much higher debt relative to the average, that they've backed other offerings with the same tax monies, that the money is to be forwarded to an individual for the purchase of something the city has once already issued bonds to construct, and that it is all possibly against your constitution.
I did not ask you for a paraphrasing of something an ancillary player claimed, I asked you for a link to the underwriter making the statements that back your claim.
Ludwig Fell Down
Registered User
It is only even arguably "exploitation" if you start from the ASSUMPTION that the parking rights that Hulsizer would be selling to the COG are worth less than what they are paying (and even then, it is only exploitation if you think that all business negotiations are exploitation - a pretty extreme position IMO). Making the assumption that the parking rights are not worth what they have been stated to be worth (using extremely conservative assumptions as the consultants were, mind you) is not a very supportable position IMO; the fact is, there is not a single person on this Board (even the folks who are loudest at denouncing the idea of $100M for parking lots) who has been able to make a sound argument - heck, any kind of argument - that they are worth less, and certainly GWI has offered precisely zip in this regard. All we have left to support that assumption is "heck, how can parking lots be worth $100M??!?", which is the position of many on the Board. The answer is the same as it has always been: "you'd be very surprised".
I'm a few topics behind but have to call out the bolded statement. A few threads back there were posters who analyzed the Hocking study and found flaws in the estimates. The two that I recall are, 1) the failure to use historical data in creating the estimates; and 2) using a flawed percentage of future variance (I'm sure I'm not stating that correctly, but hopefully you get the idea).
Maybe someone who is more tech savvy than me can find these posts.
The fact that you don't agree that the estimates are faulty is a far cry different from "no one on these boards" presenting "any type of argument" that the parking values are inflated. This is the type of generalization that you often decry, for good reason.
I'd also like to hear your rationale as to why the assumptions were "extremely conservative." That position seems a bit . . . . extreme.
Gump Hasek
Spleen Merchant
If what you mean to say is the market has determined on its own, without the GWI's involvment and nearly daily appearances on radio, television and the press, that the transaction is unconstitutional, I will submit that is a possibility. As it is possible for a monkey to fly out of my rear end.
PS: Yes, that is exactly what I am saying. Are you aware that Moody's downgraded all of Glendale's other debt upon the prospect of this issuance? Why do you think that happened? A hint would be that an already overextended city is increasing its debtload, leading to increased likelihood of default. That was all done ex-GWI lifting a finger, FYI.
What time will you be putting on the monkey show?
False.
There is nothing in the deal structure which increases risk. You might have something if the deal was structured such that investors only had recourse to parking revenues, but as you know that is not the case. The bonds are backed by excise taxes as well.
As you also might know if you have read the bond materials, the COG's debt coverage ratio is approximately 4.5 to 1, which is an outstanding number (well, i don't know if you would know the latter part, but now you do).
This is a red herring. If you are in fact a bond trader, you know very well that there is risk and then there is the perception of risk. Perception of risk is exascerbated in a tight bond market, as you (should) very well know.
In regards to your requests for a link, you know very well that the underwriter has not publicly stated any such thing, nor would an underwriter ever publicly state any such thing. It would be beyond irregular (and likely in breach of their legal duties) to do so. What we have is a clear enough interest rate market range for A2-level credits, versus what has been reported to be the range for this transaction.
As you (should) ALSO know, the debt levels of COG (or indeed ANY issuer) are already reflected in the rating issued by the credit agencies. It was for debt level reasons that COG was taken down from an A1 to an A2. Yet you (seemingly disingenuously) suggest that debt levels are then FURTHER taken into account in adding what is reportedly hundreds of basis points to the debt issue.
We both know that is not the case. Only one of us is apparently prepared to acknowledge it.
[EDIT - CAUGHT THIS ONE AFTER I POSTED THE ABOVE.]
This is utterly indefensible. A bond issue for something that will generate incremental net revenue (whatever amount one thinks it might be) for the COG is a less favourable, higher risk issue than plain vanilla non-revenue-generating infrastructure! If that is your example of "assess(ing) risk", then I don't know what to say. I assess risk for a living too - long term risk, as opposed to investment risk with a horizon that can last as short as a few seconds. Your example is not how it's done, in either case.
Secondly, your statement that "the money is to be forwarded to an individual for the purchase of something the city has once already issued bonds to construct" is, as you hopefully know by now, incorrect. If you don't already know, I invite you to re-read what you wrote and spot the significant error.
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