If all goes as planned, by the morning of April 21 “some $600 million will be wired to a bank account,” and Nashville will have capital to bankroll its new convention center.
That’s how Metro Finance Director Richard Riebeling describes the culmination of the next three weeks, as the mayor’s office prepares to hit the road to meet with investors interested in purchasing bonds to fund the $585 million Music City Center.
Debt service accrued from the four different series of bonds are to be paid off from a combination of fees and taxes that target tourists, a plan approved by the Metro Council in January.
Addressing the nine-member Convention Center Authority on Thursday, Riebeling said the bond issue — in the form of a 256-page preliminary offering document — was finalized Tuesday and has been sent to investors. The bond offering, underwritten by Goldman Sachs Group, is featured on a Web site that’s been made available to investors.
“That is out in the marketplace now,” said Riebeling, adding that 15 to 20 major investment firms have already linked to the site.
But the real sales pitch for the bond issue begins next week, as Riebeling, Mayor Karl Dean and others fly to New York, Philadelphia, Boston and perhaps Chicago to visit several large firms that could be in the market to purchase Music City Center bonds. Meetings will also take place via telephone.
“Our financial advisers think because of the size of the deal — it’s a little unusual because of the structure — that we ought to go meet with them individually so they understand the importance of the deal and to really explain the structure, so they get comfortable with it,” Riebeling said.
Earlier this week, Dean and Riebeling sat down and produced a 20-minute audiotape in which the two summarize the convention center project, offer some insights into Nashville and discuss the financing timeline.
“It just gives [potential investors] a little more flavor for the deal,” Riebeling said of the tape.
By April 12, a retail order period will begin, which officially allows investors to buy $27 million worth of tax exempt bonds. The project’s taxable-bonds are to be priced the next day. Formal closing on the sale of bonds should come by April 21.
“I have confidence we’ll have a very successful sale,” Riebeling said.
At Thursday’s meeting, the Convention Center Authority also unanimously voted to set a guaranteed maximum price of $415 million for construction to be carried about by the joint team of Nashville’s Bell & Associates Construction and Bethesda, Md.-based Clark Construction Group.
“This means the construction of this project is locked in,” Riebeling said.