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Ratings agency gives thumbs up to Raiders stadium bonds

Riley Snyder
Riley Snyder
IndyBlog
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A photo rendering of the Las Vegas Stadium

A major credit rating agency sees no major risks for $750 million in government bonds about to be sold by Clark County to help pay for construction of a $1.9 billion domed stadium in Las Vegas that will host the NFL’s Oakland Raiders.

In an analysis published on Monday, Moody’s Credit Agency said the stadium bonds approved by the Clark County Commission in a 6 to 1 vote last week will maintain an “AA1” rating, which it defines to be “high quality and are subject to very low credit risk.”

The rating agency gave the bonds high marks because of the dedicated funding source for the bonds — an uptick in Southern Nevada hotel room taxes — as well as other reserve accounts in place to make any payments needed in the case of “unprecedented declines” in those taxes.

“Given its debt burden and substantial tax base, the county faces manageable credit risk from this debt issuance,” the agency wrote.

Under legislation passed during a special session of the Legislature in 2016, the $750 million in public funds used for stadium construction will come from a dedicated hotel room tax — 0.88 percent on the Strip and 0.5 percent for other parts of the county. The rest of the costs for the $1.9 billion stadium will be paid through a $600 million loan from Bank of America to the Raiders, $250 million in sales from personal seat licenses and $200 million from an NFL loan program.

Moody’s highlighted two additional “security features” to help make any debt payments if hotel room taxes dip — two reserve funds, one funded with $45 million from bond proceeds and another funded up to $9 million from excess hotel room tax revenue.

The report also notes that since 1970, hotel tax collections in Clark County have only materially declined during the 2008 recession.

The bonds themselves will go up for sale on Wednesday.

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