CHICAGO The credit rating for Bridgeview, Illinois, fell into the junk level on Friday after S&P Global Ratings hit the Chicago suburb with a four-notch downgrade to BB-minus.
S&P cited debt pressures on Bridgeview, which issued $135 million of general obligation (GO) bonds in 2005 for a stadium that it owns and manages.
"The downgrade reflects our view that the village will continue to face acute business, financial, and economic uncertainties related to its debt burden, particularly the debt issued for its Toyota Park stadium," S&P analyst Blake Yocom said in a statement.
S&P placed the junk rating on a watch list for a possible further downgrade due to concerns over potentially reduced market access and weakened liquidity for Bridgeview.
Steve Landek, Bridgeview's mayor, said he believed the downgrade was triggered by a plan the suburb was considering to restructure $24.5 million of variable-rate bonds to a fixed-rate mode with a 2047 maturity. He said Bridgeview would come up with a better plan over the next 90 days.
The credit rating agency said it expects Bridgeview, which has used restructurings in the past to ease debt service payments and minimize property tax hikes, to continue the practice, possibly pushing bond maturities out to years beyond the useful life of the stadium.
It added that the "underperforming" stadium has left the suburb with an "extremely high" GO debt burden that totals about $256 million and "very weak" liquidity.
With seating for as many as 28,000, Toyota Park, which opened in 2006, hosts soccer games, concerts and other events in the village of 17,000 located southwest of Chicago.
(Reporting by Karen Pierog; editing by Lisa Shumaker)