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Market for arena bonds? Maybe it's a little dicey

Everybody's favorite AY finance blogger, the pseudonymous Gari N. Corp, takes a gander at the actual market for tax-exempt arena bonds.

First, a quote from the Times today:
Some real estate executives and critics said it would be hard to sell the bonds for such an uncertain project. But Jay Abrams, a bond analyst at FMS Bonds, said there “is definitely an appetite for tax-exempt bonds in New York, and elsewhere.” The lawsuit, he added, “is not necessarily a game-killer. At the right price, there’s always a buyer for bonds.”

Then Gari gets to work:
I don't know whether Bagli tried to ask Ratner whether he had a plan for getting the bonds out ahead of the litigation being resolved. I suspect Ratner would have been deliberately vague in any case. The reasons being that any way round the December 31 deadline for a bond financing would be fiendishly convoluted.

...It's possible that the arena could issue tax-exempt bonds with an eye-watering rate of interest before the end of the year, and then try and refund them, though I doubt those bonds would be tax-exempt. More importantly, at some point, the interest rates on a badly-assembled tax-exempt financing would be so high that Ratner might as well wait and just issue the bonds in the taxable market if it takes until 2010 to get the litigation dismissed.

Read the rest of the post here.