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A+ Bond Rating for $117M Convention Center Loan

BOSTON-Fitch Ratings assigns an A+ rating to the city's $117 million convention center loan. With this financing, the city meets the bulk of its financial commitment to the 1.6 million sf convention center, which will be New England's largest convention facility and among the largest in the US.

By Naomi Grossman | Updated on April 12, 2002

BOSTON-Fitch Ratings has assigned an A+ rating to the city’s $117 million convention center loan. The loan was passed in 1997 as special obligation bonds, and is scheduled too receive bids on April 23. They will be due serially on May 1 from the years 2003 through 2027.

In a released statement, Fitch indicates that this offering represents a “new security for the City of Boston” due to the revenues from a room occupancy excise tax, a rental car surcharge, proceeds from the sale of hackney licenses, and a small interest cost subsidy from the state. Bond proceeds, in combination with accumulated pledged receipts to date, will be used, in part, to retire $157.8 million of outstanding general obligation bond anticipation notes which are due May 1, 2002

The statement notes that the A+ rating incorporates Boston’s narrowly defined role in the convention center project, the favorable coverage of debt service by pledged receipts and strong legal provisions. Under the Convention Center Loan Act of 1997, Boston, acting through its redevelopment agency, and the state, acting through its convention center authority, are jointly developing the Boston Convention and Exhibition Center. Boston is responsible for the site acquisition and preparation, including environmental remediation and the state is responsible for the design, construction and operation of the facility. Site acquisition and preparation are substantially complete and the early stages of construction are underway.

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