Bonds for Mets’ Citi Field lowered to ‘junk’ status

Citi Field’s bonds have been lowered to junk status by Standard
& Poors and Moody’s Investors Service because the company that
insures the reserve fund for many of them is having financial
troubles.

The bonds’ underlying rating was dropped from Baa3, an
investment grade, to Ba1, a speculative grade, by Moody’s last
Thursday.

Standard and Poors cut the bonds from BBB to BB+ on Tuesday
while still giving them a “stable outlook.”

The Mets sold $613.1 million of three types of bonds in 2006
and an additional $82.28 million of bonds last year. Ambac
Assurance Corp., the company having financial difficulty, insured
$547.6 million of the 2006 PILOT bonds (payment in lieu of taxes).

“We lowered all the bonds ratings because the 2006 PILOT
bonds do not have a reserve fund with adequate liquidity to support
any disruption in project cash flow,” Standard & Poors said.
“Because Ambac is currently rated speculative grade, the
creditworthiness of the debt service reserve fund supported by the
surety policy is below the creditworthiness of the bonds.”

S&P said the stable outlook “reflects the expectation
that the project will perform in line with expectations.”

The $800 million ballpark opened last year, and the Mets went
a dismal 72-90. The team did not immediately respond to a request
for comment.

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