Cowboys stadium bonds will be refinanced

ARLINGTON — City Council members voted Tuesday to refinance $164.2 million of Dallas Cowboys stadium bonds, a move that will cost the city an additional $4.7 million in fees but potentially limit the risk to the city associated with variable-rate bonds.

The variable-rate bonds at issue had previously saved the city $3 million in interest payments compared with what the city would have paid if the bonds had initially been issued at a fixed interest rate, Mayor Robert Cluck said.

But interest rates on the bonds have spiked as high as 9 percent in recent weeks, prompting the city to discuss its financing options at its afternoon meeting Tuesday.

The city has paid interest of 3 to 4 percent since the bonds were issued in 2005. But uncertainty in the credit market and the downgrade of its bond insurer’s rating has caused rates to jump dramatically.

The refinanced bonds could be issued as early as August at a fixed interest rate of about 5 percent, city staff members told the council.

Arlington taxpayers approved a sales tax increase in 2004 to pay for bonds that would fund the new $1.1 billion Dallas Cowboys stadium. The city’s portion is capped at $325 million.

By Sept. 30, the city expects to have collected more than $86 million in sales tax since 2004 to pay for the bonds, about $30 million more than it had anticipated. Even with the refinancing, the city expects to pay off the bonds by 2023, about 12 years earlier than they are due.

To date, the city has paid about $19 million in interest and fees only for the variable-rate stadium bonds.

In addition to those bonds, the city has $113.6 million and $20.1 million in fixed-rate bonds for the stadium project with interest rates of 4.68 and 4.78 percent, respectively.