Steve Cohen Give Mets Fans and Bondholders Something to Cheer
(Bloomberg) -- Steve Cohen, the new billionaire hedge-fund owner of the New York Mets, has given the team’s long-suffering fans something to celebrate. His deep pockets are also good for holders of about $600 million in municipal bonds issued to build Citi Field.
Moody’s Investors Service Thursday put the ballpark’s Baa3-rated debt on review for an upgrade based in part on Cohen’s purchase of the team, “resulting in a sizable increase in ownership liquidity and balance sheet strength.” Cohen, founder of Point72 Asset Management LP and worth more than $10 billion, bought the Mets from the Wilpon family for about $2.5 billion.
Moody’s also cited an amendment to the stadium use agreement that notably increases the ballpark’s revenue and the expectation of a full debt refinancing in early 2021 for its review of the debt, rated at the lowest investment grade. The ballpark generated $148.6 million in revenue in 2019 from admissions, advertising, concessions, parking and luxury suite premiums. The debt is backed by payments in lieu of property taxes to the city, and lease and installment payments.
“Steve Cohen’s purchase of the New York Mets and Queens Ballpark Company LLC is credit positive for Ballpark that currently relies on equity support to make its PILOT, rent, and installment purchase payments owing to the material interruption of revenues amid the Covid-19 pandemic,” Moody’s said. “Cohen is expected to continue to provide liquidity support to Ballpark, if needed, because of the stadium’s long-term revenue generation potential that contributes to the high franchise value of the team.”
The Moody’s review will focus on the financial benefits of the new ownership, as well as the forecast resiliency for new revenue at the 42,000-seat stadium in Queens and the impact of debt refinancing. Those positive factors will be weighed against the attendance decline resulting from the pandemic. With the vaccine distribution beginning, prospects for a recovery are better than six months ago when it was uncertain if Major League Baseball’s 2020 season would even be played.
Earlier this week, the Mets signed catcher James McCann, a free agent from the Chicago White Sox, to a four-year deal worth more than $40 million and hired Jared Porter, an assistant with the Arizona Diamondbacks, as general manager. The team is also showing interest in Liam Hendriks, among the top relievers in the free-agent market, to shore up the teams’ weak bullpen.
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