• • Up to $4 million per year of Reliant Stadium parking revenue was pledged to back any shortfall in the Reliant Stadium bonds. The bond insurance company required this pledge, due to the Texans being a brand new entity with no prior financial history. Since the opening of Reliant Stadium, approximately $56 million in parking revenues have been received by Harris County. Until this year, none of those revenues was ever needed. Due to the credit crisis, up to $4 million per year of those parking revenues will now be used during the five years of accelerated payments.
• • If for any reason, the sports authority is unable to make payments on the bonds, the bond insurance company, MBIA, would be required to pay the debt service on the bonds, which is exactly why the sports authority purchased insurance when the bonds were issued.
• • If the bond insurance company for some reason did not pay the bonds, then either JPMorgan Chase or the bondholders would have to wait until enough funds were collected through the current financing structure, or until the sports authority could refinance, if feasible.
This is basically the argument that Gene Locke made in my interview with him. All I can say is that the previous reporting, both in the Chron and elsewhere, does not give the impression that JPMorgan Chase or the bondholders would have to wait to get the money they’re demanding. And even if that is the case, it seems to me that refinancing may well include the possibility of higher annual payments, as such a re-fi may mean shorter terms for the loan. Friedman didn’t address that point, nor did he specifically call out any aspect of the Chron story as wrong, so I don’t know if that means I’m misunderstanding something, or if he’s simply glossing over that stuff. But there you have it from their perspective.