A Louisiana state agency sold $527 million in bonds to refund a previous issuance and make improvements to stadiums within the state.
The bonds, which were issued by the Louisiana Stadium and Exposition District (LSED), were sold in two series. The tax-exempt Series 2023A bonds consist of almost $498 million and mature between 2030 and 2053, yielding between 3.1% and 4.34%. The taxable Series 2023B bonds consist of $29 million and mature between 2024 and 2030, yielding between 5.115% and 5.38%. The securities received a rating of A2 from Moody’s Investors Service and A from Fitch Ratings.
The rating reflects “a healthy rebound of the New Orleans tourism industry (and a corresponding rebound in pledged tourism-related taxes), and positive near-term prospects for the city’s tourism industry,” according to Fitch. Large tourism events, including Mardi Gras and the New Orleans Jazz & Heritage Festival, returned in full force to the city last year after COVID-19 pandemic-related disruptions.
The bonds will be backed by the district’s revenue, which is supported by a 4% hotel occupancy tax in the populous parishes of Orleans and Jefferson. Those parishes include New Orleans and its surrounding suburbs. The bonds are also supported by a debt service reserve fund managed by the district.
The LSED maintains and operates six venues in Louisiana, including the stadiums that house the NFL’s New Orleans Saints and the NBA’s New Orleans Pelicans.
BofA Securities Inc served as lead underwriter on the issuance, purchasing the bonds for almost $567 million. The price reflected a premium of $40 million.