KBRA assigns long-term ratings to the Sports Authority of the Metropolitan Government of Nashville and Davidson County Stadium Project Senior Revenue Bonds, Series 2023A at AA- Stable Outlook, Stadium Project Subordinate Revenue Bonds, Series 2023B at A+ Stable Outlook, and Stadium Project Revenue Bonds (Non-Tax Revenue Pledge), Series 2023C and Series 2023D (Federally Taxable) at AA Stable Outlook.

Key Credit Considerations

The rating was assigned because of the following key credit considerations:

Credit Positives

• Enclosed stadium with modern amenities provides potential for significant revenue enhancement and sales tax collections, and opportunity for additional events not currently attracted to the existing stadium.
• Diverse and growing economic base with significant tourism/convention activity has fueled pronounced HOT increases and demand for more hotel accommodations.
• Authority contribution is capped with no responsibility for construction cost overruns or maintenance of the completed facility; construction delays will have a very limited impact on pledged revenue generation.
• FY 2022 pledged revenues currently provide coverage of MADS requirement for the Series 2023A and Series 2023B Bonds.

Credit Challenges

• The Bonds are secured by sources that may at times be adversely affected by economic factors.
• The number and popularity of events held at the stadium correlates with sales tax, ticket tax and team rent collections.
• Amount of non-tax revenue backstop available may be dependent upon general economic activity and is subject to additional Authority and Convention Center Authority issuance which holds a prior lien on revenues.

Rating Sensitivities

For Upgrade

• Pledged revenue performance well in excess of current projections leading to bond redemption.

For Downgrade

• Secular decline in pledged revenues.

To access rating and relevant documents, click here.

Methodologies

Public Finance: U.S. Special Tax Revenue Bond Rating Methodology

Public Finance: General Revenue Bond Methodology

ESG Global Rating Methodology

Disclosures

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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