Tennessee Titans New Stadium Bonds Debut With High Credit Rating

A credit rating agency has given a “high” credit rating to the bonds that will finance the bulk of the new stadium for the NFL’s Tennessee Titans.

The Titans will be getting a new state-of-the-art stadium backed by record-setting public subsidies. The Titans are looking to build a new 60,000 seat enclosed stadium costing between $1.9 billion and $2.2 billion, according to early projections. The Titans new stadium would eclipse the Allegiant Stadium in Las Vegas to make it the NFL’s second-most-expensive venue behind the $5 billion SoFi Stadium in Southern California.

Today, S&P Global Ratings assigned its ‘A’ long-term rating to the Sports Authority of The Metropolitan Government of Nashville and Davidson County (the Sports Authority), Tenn.’s series 2023A and stadium project revenue bonds and its ‘A-‘ long-term rating to the Sports Authority’s 2023B stadium project subordinate revenue bonds. An ‘A’ rating denotes expectations of low default risk and the capacity for payment of financial commitments is considered strong.

The preliminary par amounts are $347.9 million on the series 2023A bonds and $75.5 million on the 2023B bonds. S&P Global says “the outlook for the bonds is stable.”

The 2023A and 2023B bond proceeds will provide financing for Nashville’s portion of project-related costs associated with the construction of an NFL stadium that will be the new home of the league’s Tennessee Titans franchise.

The Titans were valued at $3.5 billion a year ago, 27th in the NFL. At Nissan Stadium in 2021 (the last season for which revenue is available), the Titans, owned by Amy Adam Strunk, generated $471 million in revenue, also 27th in the league.

According the to S&P Global news release, “The ‘A’ long-term rating on the proposed 2023A obligations and the ‘A-‘ long-term rating on the proposed 2023B obligations reflect our view of the obligations’ strong-to-adequate economic fundamentals and moderate-to-high revenue volatility,” said S&P Global Ratings credit analyst Randy Layman.

“The ‘A’ long-term rating further reflects our view of the obligations’ strong coverage and liquidity assessment, and the ‘A-‘ long-term rating further reflects our view of the obligations’ adequate coverage and liquidity assessment,” Mr. Layman added.

The stable outlook reflects our expectation that coverage on the 2023A and 2023B bonds will remain sufficient and support debt service.

The state will provide $500 million of the funding through a bond estimated to cost taxpayers $710 million over 20 years, according to documents from Gov. Bill Lee’s administration. The rest of the funding is expected to come from the Titans, Metro Nashville and the NFL. Nashville’s Metropolitan Council on Tuesday voted in April to approve a state-backed proposal that would see the Titans’ current home demolished.