So, the other arena bonds really are junk: $146.8 million issuance rated "B" by S&P, interest rate could hit 14%

After $500 million in tax-exempt arena bonds earned a Baa3/BBB- rating, one notch above junk, from the ratings agencies Moody's and Standard & Poor's, the latter has rated the $146.8 million in taxable bonds B, which is considered "very speculative."

The interest rate can go up to 14%.

From the report, which suggests caveat emptor:

Standard & Poor's Ratings Services assigned its preliminary 'B' rating to BAHC's $146.8 million senior secured notes that mature in 2017. We assigned a recovery rating of '6', indicating that lenders will realize between 0% and 10% recovery of their principal in a default scenario. The outlook is stable. The notes are secured by distribution payments from [Brooklyn Events Center].

(Emphasis added)

Negligible chance of recovery

Note that at other times S&P has used the term "negligible" to describe a similar chance of recovery, such as here:

We assigned a recovery rating of '6' to this debt, indicating our expectation of negligible (0%-10%) recovery in the event of a payment default.

The bonds will be issued by the Brooklyn Arena Holding Company, which is a subsidiary of Brooklyn Arena LLC and owned by an investor group headed by Bruce Ratner of Forest City Ratner.

Prokhorov the buyer?

These taxable bonds may be bought by Mikhail Prokhorov, slated to own 80% of the Nets and 45% of the arena company, according to Project Finance magazine; if so, and there's not enough revenue from the project to make the bond payments, he'd fully control the arena.