Press Release|Public Finance

KBRA Assigns Ratings to Stadium Revenue Bonds of Metro Govt of Nashville and Davidson County Sports Authority

10 Jul 2023   |   New York


KBRA assigns long-term ratings to the Sports Authority of the Metropolitan Government of Nashville and Davidson County Stadium Project Senior Revenue Bonds, Series 2023A at AA- Stable Outlook, Stadium Project Subordinate Revenue Bonds, Series 2023B at A+ Stable Outlook, and Stadium Project Revenue Bonds (Non-Tax Revenue Pledge), Series 2023C and Series 2023D (Federally Taxable) at AA Stable Outlook.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

  • Enclosed stadium with modern amenities provides potential for significant revenue enhancement and sales tax collections, and opportunity for additional events not currently attracted to the existing stadium.
  • Diverse and growing economic base with significant tourism/convention activity has fueled pronounced HOT increases and demand for more hotel accommodations.
  • Authority contribution is capped with no responsibility for construction cost overruns or maintenance of the completed facility; construction delays will have a very limited impact on pledged revenue generation.
  • FY 2022 pledged revenues currently provide coverage of MADS requirement for the Series 2023A and Series 2023B Bonds.

Credit Challenges

  • The Bonds are secured by sources that may at times be adversely affected by economic factors.
  • The number and popularity of events held at the stadium correlates with sales tax, ticket tax and team rent collections.
  • Amount of non-tax revenue backstop available may be dependent upon general economic activity and is subject to additional Authority and Convention Center Authority issuance which holds a prior lien on revenues.

Rating Sensitivities

For Upgrade

  • Pledged revenue performance well in excess of current projections leading to bond redemption.

For Downgrade

  • Secular decline in pledged revenues.

To access rating and relevant documents, click here.


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