Yum! Center Hopes For Bond Upgrade

Thanks to improved financial performance since AEG took over operations of the KFC Yum! Center Louisville Arena Authority hopes to see its construction bonds for the venue lifted out of “junk” status.

“I think we have significantly improved on the operations side,” Authority chairman Larry Hayes told WHAS-TV in Louisville, Ky. “In my initial discussions with Moody’s (Investor Services), I think they are very pleased at the fact we’re going to show a pretty amazing operating profit this year.”

The arena, originally operated by the Kentucky State Fair Board, has been operated by AEG since July. Moody’s downgraded the bonds to “junk” status in May 2012, citing factors including tax increment financing revenues falling far short of projections – about one-third of forecast revenue, according to WHAS.

An upgrade by Moody’s would allow the authority to refinance its $349 million construction debt, Hayes told the TV station.
In addition to improving its operating performance, the authority is in talks with the University of Louisville, which has a lease agreement for the KFC Yum! Center and controls most of its scheduling, marketing and revenue streams.

The arena hopes to capture a larger share, about $250,000 annually, of signage revenues in addition to improving scheduling issues to allow more flexibility in booking big-name artists for concerts during Louisville’s basketball season, according to WHAS.