Latest News

Arlington paying more for Cowboys stadium debt

Arlington is paying more than expected on Cowboys stadium debt after one of its bond insurers was downgraded by rating agencies because of its debt risk, city officials said today.

The City Council is scheduled to discuss the issue Tuesday.

The city is paying higher fees on $164 million in bonds insured by MBIA, Inc., which was downgraded from AAA to AA by three agencies. Those bonds have a low-fixed interest rate, 4.3 percent, but they also have variable fees tied to market conditions. In some cases, the fees have jumped from 0.1 percent a week to more than 5 percent a week.

“We still have a very favorable and very low cost of financing on this, but with the market changing we think we need to change our mode of financing so we can keep our costs as low as they can be,” Deputy City Manager Trey Yelverton said.

Another $134 million of stadium-related bonds was financed at fixed-interest rates of 4.68 and 4.78 percent, but without the variable debt-service fees.

The city is considering switching to another insurance agency with a higher credit rating or financing the bonds differently at a fixed interest rate with no variable fees, Yelverton said.

The city has issued $297.7 million in bonds to help finance the $1 billion stadium under construction near North Collins Street and Randol Mill Road. Arlington investment is capped at $325 million, but the actual cost over time will be higher because of interest on the bonds.

Arlington’s bonds are being repaid by sales tax, hotel occupancy tax and rental car tax revenue.