Bond difficulties could delay arena construction - WDRB 41 Louisville News

Bond difficulties could delay arena construction

Demolition is now well underway but construction on a new Louisville downtown arena may not begin this fall as planned.

The Arena Authority has encountered a new procedural snag as it tries to raise construction money.

Wednesday was supposed to be a day of celebration as the Arena Authority, the Mayor and Governor marked the end of construction bond sales.

But a familar problem -- insurance on the bonds -- put the party on hold.

On Saturday Mayor Abramson was looking forward to Wednesday's Arena Authority meeting and word bonds were sold and construction money was in the bank.

Arena Authority Chairman Jim Host was confident finally finding a strong bond insurance company would lead to a successful bond sale.

But on Tuesday, Moody's Financial Services threatened to downgrade Assured Guaranty because of concerns about it's financial health.

In a telephone interview, Jim Host told Fox 41's Dick Irby Assured Guaranty officials are shocked that Moody's is questioning their financial stability.

Host says the company believes it has plenty of reserves to back up the insurance it issues on big projects.

Host is hopeful Assured Guaranty will prove its case, and the bond sale will be completed next Wednesday.

If its rating is lowered, the bond sale may be delayed indefinitely.  That also likely would delay construction and put the arena's 2010 opening date in jeopardy.

Back in February the first company hired to insure arena bonds had to pull out because of financial problems.

It took until May to reach an agreement with Assured Guaranty.

Another three month delay in selling construction bonds would raise doubts the arena can be completed in time for U of L's fall 2010 basketball schedule.

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