Fitch Keeps Eye On NHL Venues
Due to the National Hockey League lockout, debt-ratings agency Fitch has put the arena-revenue-backed notes of Los Angeles’
Fitch had warned that if the NHL season was canceled, as it has been, the agency would downgrade the public debt of the two venues, which host hockey’s Los Angeles Kings and Denver’s Colorado Avalanche.
They are the only two arenas with publicly rated debt; those with privately placed debt might be in more dire straits but are not rated by Fitch.
The Staples Center hosts pro basketball’s Lakers and Clippers among other pro sports teams, while the Pepsi Center hosts NBA’s Nuggets, and both arenas have their fair share of concerts and community events. The potential downgrade by Fitch does not mean the arenas are financially hemorrhaging.
An arena with an NHL team as its sole tenant is far more likely to be looking at a depressing bottom line.
Staples Center has $280 million of L.A. Arena Funding LLC revenue-backed notes outstanding, according to The Wall Street Journal, and the Pepsi Center has $110 million of Denver Arena Trust notes.
“Since the Staples Center’s opening, the arena has had strong revenue generation and sound debt service coverage,” Fitch said in a statement, “and, while there may be lower revenues in the short term, debt service coverage during this period is expected to be adequate at this rating level.”