Friday, November 13, 2009

Observer: as delays mount on bond sale, the clock ticks (but Ratner could still pull it off)

Yesterday, I pointed out that Bruce Ratner predicted to the New York Observer that bonds for the arena would be rated and sold in mid-October. Now, the Observer's Eliot Brown reminds us that Ratner first predicted an end-of-September date.

In today's piece, headlined New Doubts About Atlantic Yards Financing as Deadline Approaches, Brown says "the project is running into trouble at the ratings agencies," which have resisted Forest City's effort to get the arena bonds rated at the crucial minimum: investment grade (BBB-) or better. Still, Ratner's confident it'll work out.

The clock ticks

Brown adds:
Forest City must first get the bonds rated, then market them, then sell them--and it's no forgone conclusion that anyone will buy them--and, finally, firm up all final agreements with the city, state, and M.T.A. on the complex real estate deal, all before Dec. 31 (with Thanksgiving and Christmas breaks mixed in). Each of these steps takes at least a few days, if not more than a week, making it hard to see how everything could get wrapped up if the bonds are not rated before the end of November, if not sooner.

ALL IS NOT TO say the deal is doomed. Mr. Ratner, with extraordinary stamina for this project and the outpouring of cash that comes with it amid a recession, has a history of executing. Further, many deals and financing arrangements go through rocky periods, where doubts are raised, before ultimately working everything out as deadlines approach.
There are lots more variables and uncertainties--read the whole piece. The gist: it's not over til it's over.

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