Tuesday, December 15, 2009

Arena bonds sell briskly; BALDC somehow forgotten

Well, with the sale of tax-exempt bonds and a planned "master closing" next week, the Atlantic Yards arena is coming ever closer to construction.

From a New York Times CityRoom post headlined Bonds for Nets’ Arena in Brooklyn Sell Briskly:
Almost six years after he bought the New Jersey Nets with plans to move the team to Brooklyn, the developer Bruce C. Ratner [updated with this addition: and a local development corporation] quickly sold more than $500 million in tax-exempt bonds on Tuesday morning for a new basketball arena in Brooklyn.

Indeed, the demand for the bonds from institutional investors far outstripped what was available and belied the project’s tortured history, years of delays and court challenges. The $1 billion basketball arena at the intersection of Flatbush and Atlantic Avenues is the centerpiece for the 22-acre Atlantic Yards development, which is to include more than 6,000 apartments.
Ratner couldn't sell tax-exempt bonds on his own. Let’s not forget the role of the Brooklyn Arena Local Development Corporation (BALDC), the questions that have been raised about it, and the curious (and reportedly abandoned) plan to issue $400 million more in infrastructure bonds.

Update: Sometime after I complained to the Times about the omission of the BALDC, the phrase "and a local development corporation" was added. It's a little more than a bland LDC, however.

Official press release

Here's the official press release, which states that the interest rate is 6.48%:
Forest City Announces Pricing of $511 Million Tax-Exempt Bonds for Barclays Center at Atlantic Yards

CLEVELAND, Dec 15, 2009 /PRNewswire-FirstCall via COMTEX/ -- Forest City Enterprises, Inc. (NYSE: FCEA and FCEB) today announced the pricing of $511 million of tax-exempt bonds to finance a portion of the construction of the Barclays Center arena at the Company's Atlantic Yards project in Brooklyn. The interest rate on the bonds was 6.48%.

"We're very pleased at the strong level of interest shown by investors in these bonds," said Charles A. Ratner, Forest City president and chief executive officer. "Demand far exceeded the total dollar volume of the bonds being marketed, a demonstration of support and confidence in the arena, in Atlantic Yards and in the future of Brooklyn. I congratulate our New York team and our advisors, and thank our public partners as we take this important next step in making this great project a reality."

Co-lead underwriters for the bond offering were Goldman Sachs and Barclays Capital.

About Forest City

Forest City Enterprises, Inc., is an $11.9 billion NYSE-listed national real estate company. The Company is principally engaged in the ownership, development, management and acquisition of commercial and residential real estate and land throughout the United States. For more information, visit http://www.forestcity.net/.

SOURCE Forest City Enterprises, Inc.

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