It only took an hour and a half Wednesday for Clark County to sell the bonds necessary to help finance the planned $1.8 billion Las Vegas stadium to 43 institutional investors.
The bonds are part of the public’s $750 million contribution to the 65,000-seat indoor stadium being built by the Raiders at Interstate 15 and Russell Road.
The stadium also will be used for UNLV football games and could someday be the site of other major sporting events, including NCAA basketball tournament games and the Super Bowl, as well as major concert events. Construction is underway and the Raiders have begun selling personal seat licenses in advance of season ticket sales for games that would begin in 2020.
Clark County Manager Yolanda King, who projected last week that the county would sell around $650 million in bonds as a result of the county already having received additional room tax revenue for 13 months, said the pricing and sale that began at around 9:45 a.m. went as planned with no surprises.
“We were able to sell 100 percent of the bonds,” Clark County Chief Financial Officer Jessica Colvin added.
The county ultimately sold $645.1 million par value on the bonds and with interest will pay off $709.1 million. The bonds carry an average interest rate of 3.94 percent over the 30-year term with maturation in 2048.
The bonds are structured to mature over 30 years with escalating debt service and a debt service coverage ratio 1½ times the forecast payment. Initially, the bond issue will fund a debt-service reserve fund equal to one year of average annual debt service. In addition, available room tax revenue in the future will fund an additional reserve to ultimately achieve a debt-service reserve fund equal to two years of average annual debt service.
Colvin said revenue is projected to be sufficient to cover both the principal and interest costs over 30 years. Payments are made twice annually on Dec. 1 and June 1 of each year.
County officials are anticipating an average annual tax revenue growth rate of 2 percent based on gradual increases in visitation, occupancy rates and average daily room rates. In the 10 years between 2007 and 2017, revenue climbed by nearly 3 percent in a time when Southern Nevada was weathering the Great Recession.
“Obviously our projections are a lot more conservative than what the average growth has been,” Colvin said. “We’re very comfortable at 2 percent, especially given the average over the 10-year period of time was at 2.84 percent. We’re being very conservative.”