Not really, but a completely different sale of the land to a different developer not building a stadium could.
Stadium Discussion
- Thread starter Gene
- Start date
As further explanation, the obligation to pay the bonds back lies wholly with an entity that was created to own nothing but the garages. This was done specifically to protect the garage owners from having to make good on the obligation if the garages lost money. [This is a pretty standard strategy and does not indicate they knew the garages would go bust].
So the only way the bonds become more valuable is if the garages suddenly start making money or they can sell one or more of them to somebody for a major piece of change.
Is this a bond series? This is my line of work and i even have no clue what you’re talking about
When you asked if anyone checked bond prices, were you talking about the parking garage bonds or interest rate moved recently?
Sorry man, you lost me. Hopefully this post helps other people but I just can’t follow this type of thing. Maybe what you said was elementary, but it’s beyond me. Sorry to waste your time
No worries.
Can't help trying again.
Developer -- Call it Company D -- wants to build garages.
First it creates a separate company which will build and own the garages and nothing else. Call it Company G.
Company D owns Company G, but they are separate legal entities.
Garages go bust and lose money.
Company G owes the bondholders money and goes bankrupt.
Bondholders would like to get the money from the Company D which has a ton of money, but even though Company D owns Company G, the bondholders can only get whatever Company G can give them. If it has no money that's too bad for them.
This way the developer protects all its other assets.
The only way the bonds pay more money and become more valuable is if (1) the garages suddenly get more customers out of nowhere which means more income for Company G, or (2) Company G sells one or more garages for a lot of money (presumably for another development like a stadium).
Developer -- Call it Company D -- wants to build garages.
First it creates a separate company which will build and own the garages and nothing else. Call it Company G.
Company D owns Company G, but they are separate legal entities.
Garages go bust and lose money.
Company G owes the bondholders money and goes bankrupt.
Bondholders would like to get the money from the Company D which has a ton of money, but even though Company D owns Company G, the bondholders can only get whatever Company G can give them. If it has no money that's too bad for them.
This way the developer protects all its other assets.
The only way the bonds pay more money and become more valuable is if (1) the garages suddenly get more customers out of nowhere which means more income for Company G, or (2) Company G sells one or more garages for a lot of money (presumably for another development like a stadium).
Imagine someone loaned you money to start a trucking business. You buy a property for a truck yard and shop, maybe a warehouse or something on site. Almost immediately, your business is doing poorly, gas prices are crazy high, freight rates are way down, trucks are expensive and so on. You are losing money and have little hope of becoming a profitable venture.
In your case, the lender see's that you are struggling and their chances of getting paid in full are slim. They can sell their rights to your loan to someone else. Based on the likelihood of you paying the loan, it will be sold at a discount to an investor hoping you will make good.
Let's say 5 years after your business launched, things are bleak. Your original lender sells their rights to your debt for 25cents on the dollar, getting some cash and washing their hands of it.
Now another five years later, the bank that bought it sells it for 60cents on the dollar.
How did it become more valuable?
Either;
Your business (or the parking garage) turned it around and is now profitable or nearing profitability.
Or
The land you put your business on has an interested buyer. The sale of the land and liquidation of your assets could yield a decent enough amount of cash to pay the lenders.
Your original loan never changed. You are still obliged to pay whoever owns the loan based your agreed upon terms. The change in price simply reflects third party investors perceived likelihood of payment and what they could recoup in a bankruptcy.
When you see a sudden change in price, especially in the vanilla muni bond market, it indicates something has changed. Since parking prices have not gone up considerably, attendance has not increased significantly, nor has any other notable change to the parking businesses prospects occurred, it can only be based upon speculation of a developer buying one or more garages, leading to a payout to the bondholders.
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I appreciate you trying, although I am skeptical I will understand but, where do bondholders enter into this. Nobody is borrowing money, not Company D or company G. Why are there bonds? If you want to take this to DM, that’s cool, so we don’t waste other people‘s time.
Someone loaned you money to start your trucking business. For the sake of keeping this as similar to the Yankee stadium garages as possible, let’s assume the city of New York loaned you the money
You still owe New York City the money they loaned you ($115 million plus interest) no matter how your business does. But if you can’t pay them back, maybe a consortium of investors say that they’ll give New York City $60 Million so at least New York City gets something out of it if they think you’ll eventually go belly up.
You still owe $115 million plus interest. You just don’t Owen it to New York City anymore.
Company D doesn't want to take all the risk. It creates Company G with a bunch of money but not enough for Company G to build the garages. Company G sells the bonds. Company D probably invested enough money into G just to assure potential bond buyers of its good faith and that it has skin in the game.
But this doesn't mean D gets off easy. If Company G gets liquidated, meaning it ceases to exist and its assets (the garages) are sold off, the owner (Company D) loses everything it invested unless all lenders - eg bondholders and all other Creditors - are paid in full. So the bondholders might lose 40% or 70% or 80% of their investment, but ownership loses 100%. Even if Creditors get paid 95% and only lose 5%, Ownership still loses 100%. That's the rule.
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Even though it's not in her district, you know AOC is going to be 100 percent against a soccer specific stadium even though she won't read the report, economic analysis, environmental analysis. She's uninformed about her job. Vote her out.
Ben Shapiro is a piece of shit racebaiter with no moral compass. He’s a straw man in human form.
AOC is a political hack. But she’s the only voice for an entire generation of voting age Americans.
Geoff Cameron is a locker room poison and a choke artist.
AOC is a political hack. But she’s the only voice for an entire generation of voting age Americans.
Geoff Cameron is a locker room poison and a choke artist.
She's not the voice of my vote!
What do we want? A Stadium!
When do we want it? Before universal income for people who choose not to work because that is a stupid economic policy!
Is that a gif from the newest season? Come on man, it's not on Netflix yet. No spoilers.
to be honest, I don't even know where that gif is from
Can we keep politics out unless directly relevant?
Yes. People choose to be unemployed so that they can receiver substandard income from the government.
Next, you’re going to tell us that people actually like government cheese.
