Press Release|Public Finance
KBRA Affirms Ratings for Stadium Revenue Bonds of Metro Govt of Nashville and Davidson County Sports Authority
3 Jul 2024 | New York
KBRA affirms long-term ratings for the Sports Authority of the Metropolitan Government of Nashville and Davidson County Stadium Project Senior Revenue Bonds at AA-, Stadium Project Subordinate Revenue Bonds at A+, and Stadium Project Third Lien Revenue Bonds and Fourth Lien Revenue Bonds (Federally Taxable) at AA. The Outlook for all Bonds is Stable.
Key Credit Considerations
The rating was affirmed 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 would have a very limited impact on pledged revenue generation.
- FY 2023 pledged revenues currently provide coverage of MADS requirement for the Senior and Subordinate Lien 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.