State may pay $95M penalty to refinance Superdome debt

The state may move to pay a $95 million penalty to refinance debt taken on to renovate the Mercedes-Benz Superdome, Bloomberg reports. The State Bond Commission will weigh a request this week from the agency that owns the Superdome for initial approval to refinance $294 million of securities. The deal would trigger the penalty to unwind related interest-rate swap agreements with Bank of America Corp., which would get the payment. The refinancing would be done through a negotiated transaction with the bank’s Merrill Lynch unit, according to documents from the Louisiana Stadium and Exposition District, which sold the debt in 2006. Merrill Lynch handled that sale through the now-moribund auction-rate securities market, and the swap agreements. If a deal is authorized, Whit Kling, the agency’s director, says it would end an unusual situation. “This has been a sore subject for some time,” he says. “None of the parties is going to get 100 percent satisfaction.” William Halldin, a spokesman for the Charlotte, N.C.-based lender, says the bank had no comment on the proposals. The agency has requested authority to sell as much as $450 million of bonds through one of four proposed options it is asking the board to look at, Kling says. Read the full story here.