Arena Authority: Bond downgrade not hurting KFC Yum! Center - wave3.com-Louisville News, Weather & Sports

Arena Authority: Bond downgrade not hurting KFC Yum! Center

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Justin Jokovick Justin Jokovick
Alex Rorke (Source: Hilliard Lyons) Alex Rorke (Source: Hilliard Lyons)

LOUISVILLE, KY (WAVE) - The Louisville Arena Authority met January 13 to discuss the November 2013 finances of the KFC Yum! Center. They say UofL basketball and volleyball games, combined with performers John Mayer, Jimmy Buffett, and comedian Katt Williams, brought in a $600,000 profit for the month of November.

"We also forecasted where we think we'll finish at the end of our fiscal year June 30 and we're looking at a 1.6 million dollar profit from arena operations from the event side," said Justin Jokovich, AEG Financial Director.

Jokovich said if the arena can reach that $1.6 million monthly profit it will be $300,000 more than budgeted.

While the numbers are in the positive, the Standard & Poor's recent downgrading of the arena (the second downgrade in a two month period from rating services) looms. The arena authority says the downgrade has no impact on the actual operations

"If you look at the S&P's and Moody's report you'll see the debt service coverage ratio is consistent and they project debt service coverage throughout the life of the bonds," said Jokovich, "So I don't think there's any room for concern at this point."

Alex Rorke, a financial advisor to the Arena Authority, said the ratings services base their ratings on how much cash flow a company has in comparison to what they have to pay in debt services.

"Cash flow projected is to be more than enough to cover debt service," Rorke said. "The rating agencies would like for it to be an even larger amount of coverage of debt service."

Rorke said they can pay the loans, but the ratings companies believe the arena should have much more cash flow than it does.

"The debt is being paid on time and the June payment is going to be made perfectly fine. They would like the coverage to be higher in order to have a higher rating."

The loans on the KFC Yum! Center are semi-annual. The facility gets its cash flow from three places: The actual operations from concerts and concessions, TIF revenue which is revenue from nearby businesses that benefit from the arena's events and Louisville Metro government. Mayor Greg Fischer recently said Louisville Metro will have no problem paying for their portion.

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