The cost of the Phoenix Coyotes is blamed for Moody’s downgrading of Glendale’s bond rating, The Arizona Republic reports.
As the city prepares to refinance $237 million in debt, in part from its investments in sports venues, Moody’s Investors Service downgraded the city’s bond rating from Aa3 to A2 and maintained a negative financial outlook for the city. An A2 rating is considered upper-medium grade and low credit risk. Some others also saw a ratings drop.
The lower rating, attributed partially to big declines in the city’s general-fund reserve the last two fiscal years “driven by payments to the National Hockey League for operating losses of the Phoenix Coyotes,” could limit potential savings because the city may have to pay a higher interest rate than estimated.
Glendale still owes $152 million of the $180 million it borrowed to open Jobing.com Arena in 2003. An additional $200 million is owed on Camelback Ranch Glendale, the city’s spring-training ballpark, as payments so far have only covered interest.
Although Moody’s notes the city’s debt burden is higher than similarly rated cities, it also noted Glendale’s strengths, which include the sales-tax increase, a focus on spending cuts and a large tax base relative to other cities.
