Arlington refinances much of its debt for Cowboys stadium

ARLINGTON — The city has finally been able to refinance a significant portion of its wildly fluctuating variable-rate bonds for the Dallas Cowboys stadium project.

Arlington had been looking to convert $164 million in bonds since July after interest rates on the debt began spiking dramatically — as high as 9 percent — because of uncertainty in the credit markets and a downgrade of the bond insurer’s rating. Monthly interest payments increased from about $500,000 to more than $1 million, according to city documents.

Under the new deal, the city is converting $104 million of that debt to a fixed rate of about 6 percent, Deputy City Manager Trey Yelverton told the City Council on Tuesday. The city also financed about $10 million in closing costs, which include new bond insurance with Berkshire Hathaway, the only remaining AAA-rated bond insurer, and fees paid to terminate the existing financing agreement.

The remaining $60 million that was not refinanced remains on a fluctuating interest rate.

The city may try to refinance that at a fixed rate next year when it can get more favorable terms, Yelverton said.

Including the new bonds, Arlington has issued more than $300 million in voter-approved bonds since 2005 to help finance construction of the $1.1 billion stadium. Of that, $134 million is financed at a fixed rate below 5 percent. Some revenue from the city’s hotel-occupancy, rental-car and sales taxes is used to pay down the bonds.

With the new financing, Yelverton said the city is projected to pay off the stadium debt by 2024 at a cost $502.9 million when interest payments are included.

That estimate is $44 million higher than the original 2005 estimate of $458.9 million.

Council members were also updated Tuesday on the Fair Share agreement on the stadium project. To date, $180 million has been paid to minority- and women-owned firms. And 112 contracts have been issued to these firms, 21 of which are in Arlington.

Katrina Keyes, coordinator for the Fair Share program, told the council that the stadium has exceeded its participation goals for the construction category and other professional services.