San Diego refinanced $156.6 million in lease revenue bonds for Petco Park through an arrangement with Bank of America that should save the city $93 million during the 25-year term, city officials said March 6.
San Diego had planned to refinance Petco Park bonds, which carried a 7.6 percent interest rate, but because of admitted errors in financial reports in 2003, the city was forced to restate its financials, and was blocked from the public bond markets.
The private refinancing deal that was priced March 5 changes the interest rate to 4.8 percent, bringing the annual debt service to $11.3 million, down from the original $15 million annual payment.
“This bond refinancing will save the city more than 25 percent of the original financing costs of the ballpark and will help to rebuild our financial capabilities for the future,” said Mayor Jerry Sanders.
The original $169.7 million in ballpark bonds issued in 2002 by Merrill Lynch carried an unusually high rate because of outstanding litigation surrounding the ballpark, and the possibility that bonds would not be tax-free obligations.
, Mike Allen