The Mets got as much as $700 million in refinancing today, according to multiple sources. Once again, baseball fans have to become financiers to try and read the tea leaves.
The Mets just refinanced either $450 million or $700 million in existing debt, sources told the New York Post and Bloomberg News reporters separately. And this is either good news or bad news, depending on your source for the news.
Certainly it's not good news that the team is so highly leveraged. It means lots of debt payments, and lots of fretting about the long-term viability of the team. For example, a ratings agency just downgraded their credit rating to BB, or two levels below investment-grade -- in other words, some think the Mets won't come out of their current nose dive.
And yet the banks at the heart of this matter just allowed the team to refinance. This was all somewhat predictable, once the news came out that CRG had finished their audit and submitted their results to the banks. If the Mets thought that the results of that audit painted them in a bad light, they never would have submitted it. That interaction -- giving the audits to the banks before the 2012 season -- paved the way for today's result of a "months-long" negotation.
By using some of their equity in SNY, the Mets -- and Sterling Equities, or the Wilpons -- have accomplished a few things. They no longer have two huge loans coming to term in the next year-plus. Now they only have the loans on the Mets coming to term. They still have to pay off all of loans, but they don't need to prove that they can pay off new loans (at least for SNY) -- they just did prove that, according to the banks.
The reports also suggest that this freed up some money for the owners of the team. That's the most worrisome part. If the Wilpons are taking money out of the Mets because they have no money, it doesn't mean good news for them as long-term owners. We already knew that they kept their information out of the CRG audit, so they are trying to keep their own numbers out of what may be a shell game. If they are insolvent long-term, this infusion of cash may just be frittered away to assuage their own debtors. That would leave the banks out in the cold in the future.
The Wilpons are still not assured of remaining in control of the Mets. And yet, this news is good news for their control of the team -- banks decided that they could pay off the debt on the team and let them push out the due date even further.
Of course, the Wilpons remaining in charge of the team longer is either good news or bad news depending on your appraisal of their stewardship.