Phoenix XXIII - Bond: The Phoenix Project

[Fugu]

I did like The Plight of the Phoenix, but given all the bond issues....

Thread XXII link: http://hfboards.com/showthread.php?t=881563

Click to read more...

 

[MAROONSRoad]

I can appreciate the honesty. And to be honest, I am not surprised to hear that. So let's get over the pretense of whether this deal is the best of no real good alternatives for the CoG. Again, Phoenix bad....Winnipeg good. Got that point about 20 threads ago.

I do not like the way pro sports leagues take advantage of cities -- playing one against the other -- and try to extort public funding for what is essentially private business. The proposed Coyotes deal is one of the most ridiculous examples of corporate welfare subsidies for a professional sports franchise. Massive public subsidies also skew the free market allowing teams to exist in markets where there is not sufficient demand. So, yes, while it would be nice to see the Coyotes move back to Canada, I find those other aspects interesting as well.

GHOST

 

[goyotes]

Seriously? Even MH conceded that CoG dragged their feet in disclosing all relevant documents to GWI.

You're getting into interesting territory by claiming their intent is to drive up the bond price. I believe their intent is to prevent Glendale from violating Arizona's Constitution. Perhaps you have better information?

Edit: I'm also under the impression that only Glendale can allow any bond sale to move forward. They are hardly the victim you pain them in this process, and there is a constitution in Arizona. Perhaps your quibble is with that document.

Let me ask you, after the thousands of recent posts, and the hundreds of pages of documents we have all reviewed in our spare time, do you really believe that the GWI lacks the information necessary to determine whether this transaction is unconstitutional? I found that exceptionally diffficult to believe personally. I also am of the opinion that the GWI is doing what they can to kill this deal because they don't like it from a policy standpoint. If it was unconstitutional, the GWI would be in court today seeking an injuction to stop the City from selling bonds to secure the sale of the team. Because, it is only their action at this point that is the only chance there is to prevent this from closing.

So far, on this issue, the GWI has proven itself to be a paper tiger.

 

[davemac1313]

Not sure they need an injunction to stop the bond sale...seems to have already happened

 

[goyotes]

If you admit it is uncollectable they why would the CoG waste taxpayers money suing the GWI, since you are all about saving taxpayers dollars? The GWI has lost many a case and are still around, so I would say they are not going anywhere win or lose.

Because when someone asks you if "you wanna go" you drop your gloves and get the first punch in. That is why I would go after the GWI, even if I couldn't collect on the judgment.

 

[cbcwpg]

So the question is:

In the eyes of the law, can the GWI legally sue an entity over a business transaction that has not yet been completed?

 

[goyotes]

Davemac1313 - The bonds will sell. The interest rate will be higher than necessary. The deal will close unless the GWI can somehow get a court to injoin the sale. What the GWI is doing is playing chicken, and for their part, they are not protecting the taxpayer. They are just driving up the cost of the bond.

 

[David_99]

Let me ask you, after the thousands of recent posts, and the hundreds of pages of documents we have all reviewed in our spare time, do you really believe that the GWI lacks the information necessary to determine whether this transaction is unconstitutional?

Where's the other $97 mil coming from?

 

[Jesus Christ Horburn]

McCown was talking to Sunnucks on The Fan 590.

According to McCown's sources, the interest rate is 8%. Sunnucks thinks it will be between 8-9%.

Both agree that there is a deadline within a matter of days.

 

[CBJ goalie]

Yes. I do question their intent. It seems they have reached some conclusion about the legality of the transaction, yet they aren't going to act upon it and plan to allow the bonds to be sold at an interest rate the will harm the taxpayer. It seems the GWI is playing games here.

You have got to be kidding.

The GWI is playing games? The only 'game' they are playing is the one the COG started, when they continuely denied and re-buffed their requests for documentation.
Tell us, what has GWI done to initiate ANY delays in this whole process?

They've been asking for info the whole time - they're not the ones making it up as they go.

 

[AllByDesign]

Yes. I do question their intent. It seems they have reached some conclusion about the legality of the transaction, yet they aren't going to act upon it and plan to allow the bonds to be sold at an interest rate the will harm the taxpayer. It seems the GWI is playing games here.

I must admit, I am getting a dizzy feeling in the ole noggeroony with the amount of times I see this being stated.

I had posted previously, but I think it went out with the bathwater, so I will re-submit my question...

Since GW started sniff around this deal, it had not only been the thought of our esteemed posters from HFBoards, but from people within the COG that had such opinions of the GWI

Sabre-rattlers
PR Croneys
Nussances that have no actual teeth
Too pre-occupied with Obama care to have any real opinion on the Coyotes
etc, etc.

Now in the last week we have the NHL/MH/COG united statements that the GWI is of concern, and could potentially de-rail the deal. Why now? Thoughts?

As an aside, since the boards crashed a few times today...

HF smashed to utter smithereens all previous 'number of users currently online' record. We broke our old record mid-month, and then smashed that one by a factor of 3x today.

Congrats Better results than TSN's Tradecentre

 

[OthmarAmmann]

thanks, no expert here on any bonds, certainly not muni bonds etc, appreciate the "dumbed down" version for us lay people. So if I understand what you are saying, the bond offering was at 6.8? initially and that now it must be much higher if the MH comment says it is 100 million more or is the 100 the difference between best case 5% and whatever they are at now?

I suppose you could say it was set at 6.8%. It might be better to say that's their asking price. I don't think the best case is a whole lot lower than that, but it could be.

The comments from MH seem to indicate that 6.8% is already a bit too high, but that he thinks the bonds are probably going to go for more than that based on the current market (based on the Illinois issue I have a tough time believing it could a lot lower than 6.8% but perhaps there could be some room). In order for the difference to be $100 million though the difference between the [GWI does not sue] interest rate and the [GWI does sue] interest rate is somewhere around 4% or more. I just picked 5% as a base and figured out what it would have to be to get to the additional $100 million.

To increase the interest cost of $173 million that's shown in the bond offering by $100 million, the interest rate would have to go from 6.8% to around 11%.

As I mentioned, each bond will have a different interest rate depending on when it matures. Every interest rate above is really just an average interest rate.

The city could also save significant interest costs by paying down the debt earlier. This reduces the principal outstanding upon which the interest is determined and also would decrease the interest rate on the debt. They could easily save $40 million just on having less debt outstanding. If that also reduced the average interest rate by 0.5% they could save over $60 million. Not to sound inflammatory, but their bond offering resembles some of the higher risk mortgages that were underwritten a few years ago.

 

[davemac1313]

Davemac1313 - The bonds will sell. The interest rate will be higher than necessary. The deal will close unless the GWI can somehow get a court to injoin the sale. What the GWI is doing is playing chicken, and for their part, they are not protecting the taxpayer. They are just driving up the cost of the bond.

They haven't sold as yet, despite many assurances they would be offered previously. Do you think that COG could be leery of the increased cost due to a higher rate and is hesitant to commit? They have to see the higher rate makes this tougher for them to show they get more than they give? Yes?

 

[NHLfan4life]

I'll be honest. Like many Winnipeggers who want the NHL back, we don't care about the taxpayers in Glendale. Since the Coyotes fans are now attacking us, I thought I'd clear the air with that. We point out issues with the lease and deal to wonder how on earth anyone could make a deal in which the COG is doing.

MH doesn't care about the Coyotes. If he did, he'd get some people together and put more than 70 million into the team. At least pay for the whole team and take the management fee to pay for the losses which he is doing.

As for the bankruptcy thing. I received an email reply from Leiberman (I know, he's anti deal) but he stated that the way MH has it setup, technically the company which will own the Coyotes can go bankrupt at any time he chooses. Peak6 nor MH is the owner but a company name created.

I don't think anyone thought otherwise. I think everyone is on the defense here so if you are being attacked or feeling so, so be it. It really doesn't matter in the scheme of things either way.

I do feel this will all be wrapped up this week.

 

[RAgIn]

Seems like their intent is to cost the Glendale taxpayer further money

I highly doubt that. GWI's motivation/obligation is to try to get the best possible deal for Glendale and its taxpayers. Litigation might be a way for them achieve this goal. We'll see.

Obviously, the way this deal has been manufactured isn't ideal. In fact, it doesn't look good at all. Im just happy I'm not a Glendale taxpayer. However, there is no other suitable owner that can be found. Hasn't been for over 3 plus years. Its apparent that its Hulsizer's ****** deal or relocation. If Hulsizer truly really believed in the Phoenix/Glendale market, he could've payed the whole thing himself (group) up-front. But obviously, he needs subsidies and cash up-front to accept this deal. It sad, really.

 

[Tommy Hawk]

"The bonds have not yet been offered."

Good god.

What the **** are these people doing?

According to one report, JPM was putting the bonds out for subscription, which is different than offering. Subscription is to gauge interest in the bonds. IF it is taking this long, must not be a lot of interest in the bonds.

 

[goyotes]

So the question is:

In the eyes of the law, can the GWI legally sue an entity over a business transaction that has not yet been completed?

And the answer is .... yes. Without a doubt, if the sale would be illegal and/or unconstitutional .... yes. In fact, suit should be brought before the harm, illegal activity/unconstitutional transaction occurrs.

 

[vivianmb]

upshall traded to columbus. coincidence?

 

[Dado]

To increase the interest cost of $173 million that's shown in the bond offering by $100 million, the interest rate would have to go from 6.8% to around 11%.

Yeah, my math came up with similiar same rate. Seems either MH is trying to blow smoke up our *** about the "extra $100M", or its true and the offering came in DOA.

 

[AllByDesign]

Because when someone asks you if "you wanna go" you drop your gloves and get the first punch in. That is why I would go after the GWI, even if I couldn't collect on the judgment.

An interesting analogy coming from someone who practices law. I've generally found lawyers tempering their options and choosing the path of least resistance in acheiving their end results.

If I took your analogy in fighting Derek Boogard I would get one punch in... of course I would have my room pre-booked in intensive care.

According to one report, JPM was putting the bonds out for subscription, which is different than offering. Subscription is to gauge interest in the bonds. IF it is taking this long, must not be a lot of interest in the bonds.

The JPM offering did state that there was a minimum pre-order in order to determine full release of the bonds. There are so many mixed messages that it is difficult to determine if the bonds won't or can't be issued. Depends on who you ask I suppose.

 

[ATHF]

According to one report, JPM was putting the bonds out for subscription, which is different than offering. Subscription is to gauge interest in the bonds. IF it is taking this long, must not be a lot of interest in the bonds.

It's become fairly clear that the COG actually selling the bonds is a bit of a hail mary as investors are staying away for a variety of reasons. I think the more interesting factor is that rather than the COG just admitting that their end around didn't work and that their deal won't work as is, they're trying to pass the buck to blame the GWI as if the GWI is the only reason why people don't want to buy. The interest rate and the reports from all of the reputable sources of bond information like Moody's go hand in hand.

If anything, GWI will probably end up saving the COG some money as they won't have to pay back nearly half a billion dollars in interest and principle. In fact, if the bonds sell at 9%, it will actually cost the COG more than their "worst case scenario" of the arena getting boarded up while they move the entire COG five miles down the road.

 

[goyotes]

They haven't sold as yet, despite many assurances they would be offered previously. Do you think that COG could be leery of the increased cost due to a higher rate and is hesitant to commit? They have to see the higher rate makes this tougher for them to show they get more than they give? Yes?

I think the council authorized a sale of the bonds and the City ordinance allows up to 9%. I'm sure the CoG will try and get the best rate they can, which is why there is so much out there now about the GWI needing to back off. As to the higher interest rate going to a gift, I don't think the GWI can make that claim given they would be at least one of the greatest factors in why the bonds sold at a higher rate. I'm sure the CoG would bring in experts that the GWI would have a hard time rebutting that would testify that the cloud of the GWI's litigation threat was the factor in raising the interest rate.

Having said that, I'm not completely sure that a court will not take into consideration the interest rate when looking at whether what the City was paying was grossly disproportionate the what direct benefits it was receiving.

 

[Brodie]

upshall traded to columbus. coincidence?

hahaha really? TNSE is controlling the team

 

[goyotes]

An interesting analogy coming from someone who practices law. I've generally found lawyers tempering their options and choosing the path of least resistance in acheiving their end results.

If I took your analogy in fighting Derek Boogard I would get one punch in... of course I would have my room pre-booked in intensive care.



The JPM offering did state that there was a minimum pre-order in order to determine full release of the bonds. There are so many mixed messages that it is difficult to determine if the bonds won't or can't be issued. Depends on who you ask I suppose.

As a litigator, you learn when to fight and when not to. This would certainly be one of those scorched earth campaigns.

The GWI is not Derek Boogard. The CoG has the real heavy weight firms on its side as bond counsel and counsel rendering an opinion on the legality of the transaction. I would put the Snell and Fennemore lawyers up against the GWI any day. That would really be Boogard punching my lights out.

Everyone needs to realize the GWI in not the ACLU. They're not a bunch of dummies, but they really are being viewed more as a problem or obstacle than a formidable foe.

 

[Acesolid]

In March 2011
an entire city council disappeared
in the town of Glendale, Arizona
while trying to save a hockey team......

A year later their footage was found in Winnipeg.


Bond: the Phoenix Project​