The Detroit, Michigan, Regional Convention Authority sold $109.2 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2039, yielding between 3.05% and 3.48%. They pay interest at 5%. The securities received a rating of AA- from Fitch Ratings and A+ from S&P Global Ratings.
The rating “reflects the substantial coverage cushion in place to absorb any future revenue volatility,” as well as growth prospects in line with inflation, Fitch analysts wrote.
The authority will use the issuance proceeds to refund bonds that the Michigan Finance Authority sold on its behalf in 2014.
The authority has ambitious capital plans. In January, it unveiled a proposal to build a tunnel and sky bridge to connect the convention center to a 600-room hotel being built nearby. The project could cost up to $70 million, the Detroit News reported.
Since 2009, the Detroit Regional Convention Authority has managed Huntington Place, the 16th-largest convention center in the United States. The bonds are limited obligations of the authority, secured by excise taxes on alcohol and cigarettes and hotel taxes.
J.P. Morgan Securities LLC served as underwriter on the issuance, purchasing the bonds for $120.6 million. The price reflected a premium of more than $11 million. Masterson Advisors LLC acted as municipal advisor.