Distressed Debt Hedge Funds Eye Yankee Stadium Parking Bonds

Jun 15 2011 | 2:29am ET

While one hedge fund manager is close to buying a big chunk of one of New York's professional baseball teams, two others are settling for the parking lots around the other's stadium.

Davidson Kempner Capital Management and Monarch Alternative Capital—which made headlines last year as it sought to derail the sale of the Texas Rangers—are buying up the municipal debt of the Bronx Parking Development Co., which owns the 11 parking lots around Yankee Stadium, Bloomberg News reports.

BDP, whose parent has defaulted on loans on two other projects in New York State, is in danger of missing an interest payment next year. The problem? Despite the fact that the New York Yankees are routinely the highest-drawing team in Major League Baseball, and despite the fact that attendance is up in the Bronx this year by 16%, fans are staying away from the garages. After a poor year last year, BDP jacked up the price to park to $35, but that seems only to have driven more fans away.

On the average game day, the lots are 57% empty, leaving BDP with 28% less revenue than it expected. The company was forced to draw on reserves to make its bond payment in April, with creditors agreeing not to declare the bonds in default in exchange for operational changes.

If BDP does eventually default, the bondholders, including Monarch and Davidson Kempner, could take over the garages themselves or force BDP into bankruptcy.


In Depth

Q&A: Brevan Howard’s Charlotte Valeur Talks Strategy

Sep 18 2014 | 11:18am ET

Charlotte Valeur chairs the board of Brevan Howard Credit Catalysts, an LSE listed...

Lifestyle

Hedgies Rock Out For Children's Charity

Sep 15 2014 | 8:40am ET

It's that time of year again—when hedgies trade in their spreadsheets for guitars...

Guest Contributor

Volkered: How Financial Sector Reforms are Creating Opportunities for Hedge Funds

Sep 16 2014 | 11:28am ET

New regulations have dramatically curtailed proprietary trading activity in investment...

 

Editor's Note

    Get A Sneak Peak Of The Alpha Pages

    Aug 25 2014 | 11:21am ET

    As many of you know, FINalternatives was recently acquired by the owners of Futures magazine, a firm called The Alpha Pages LLC. Today marks the soft-launch of a new sister site for both publications. As its name suggests, The Alpha Pages will cover all types of alternative investments, going far beyond the more well-known ones such as hedge funds and private equity. Read more…

 

Futures Magazine

September 2014 Cover

The London Whale: Rogue risk management

Credit default swaps brought down the London Whale and cost JPMorgan $6.2 billion. Here is how it happened.

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.