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Thursday, March 29, 2018

Oakland Raiders Las Vegas Stadium Bonds Get Aa1 Rating - Visitor Data Bad News

Oakland Raiders Las Vegas Stadium Bonds Get Aa1 Rating - Visitor Data Bad News - Video

Oakland Raiders Las Vegas Stadium Bonds Get Aa1 Rating - Visitor Data Bad News I was just informed by Clark County that the Oakland Raiders Las Vegas Stadium Bonds have received a Aa1 rating from Moody's Rating Agency, and the County expects to receive a similar rating from Standard and Poors.  In that case, the bond rating would be AA+.   That is exactly the rating I used in my many bond issue spreadsheet tests.  So, there's a still a huge problem, and because of the latest Las Vegas Convention and Visitors Authority statistics continue to show a problem.   February 2018 visitor statistics show a six-tenths of one percent drop off in total visitors compared to February 2017: 3,130,400 for 2018 versus 3,150,500 for 2017.  And for the year to date, the LVCVA reports a 2.2 percent drop in 2018 from 2017.    The upshot of all of this is continued watching of the market.  As one County rep told me, not for attribution to source: "with respect to your notes regarding the room tax, we have performed and continue to perform various stress tests on the room tax revenues and the County’s ability to meet its debt and reserve requirements.  This is a normal process, but given the somewhat unique characteristics of this transaction we have stressed our models even further.  The purpose of this is to better understand the latitude that we will have under unexpected circumstances.  These tests reflect that the very conservative protective features that we have built into the enabling legislation and the bond structure (coverage, reserves, conservative estimates, etc.) are reasonable safeguards against aberrations in future revenue performance." If the County can't meet the debt service requirements, it has informed me it will not be able to give the Raiders all of the $750 million for the Las Vegas NFL Stadium.  The Raiders would have to fill in the monetary gap in some way. The overall problem of the too-small-room-tax-rate remains.  And has the County on a constant watch for how the stadium hotel tax revenue is performing.   Stay tuned.


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