Monorail secures new loan to pay off $10M in bonds due Monday
The Las Vegas Monorail Co. says it has secured a new loan to pay off $10 million in bonds and additional interest that come due Monday.
Ingrid Reisman, spokeswoman for the private nonprofit, wrote in a statement that the new deal will also cover an additional $3 million in monorail bonds set to mature in 2055. However, she did not divulge the loan’s exact amount, its interest rate or its financier.
The announcement came as public financial information indicated the Monorail Co. was unlikely to repay the $10 million bond without outside financial assistance. As of Friday the bond’s trade price was a meager 3 cents on the dollar, according to the Financial Industry Regulatory Authority’s online market data center.
“The market does not think this bond is going to be paid off,” said Hugh Anderson, managing director at HighTower Advisors in Las Vegas.
Reisman wrote that the Monorail Co. is still working to secure an additional $172 million to extend its 3.9-mile long track on the Strip’s east side to Mandalay Bay and to the MSG Sphere at The Venetian arena project.
“We intend to finance the expansion program as planned,” she wrote. “When we have additional details, we will share as appropriate.”
Earlier this year Monorail Co. president Curtis Myles asked the Clark County Commission to guarantee up to $135 million of hotel room tax revenue over 30 years if the monorail needed it to help pay for the extensions. The commission has yet to make a decision on the request.
The Monorail Co. has also approached Nevada Gov. Steve Sisolak’s office “regarding a substantial new bond financing proposal,” chief of staff Michelle White confirmed Friday.
“Despite rumors to the contrary, the Governor has made no determination regarding LVMC’s proposal,” White wrote in a statement. “Any decision the Governor makes will only take place following a thorough review and with substantial input from his staff and state agencies.”
The Monorail Co. has repeatedly delayed the start of construction on its planned extension to Mandalay Bay. Securing new bonds to finance the project have proven difficult for a system that went bankrupt in 2010 after ticket sales fell well below official projections.
Those same problems still plague the monorail. Budget documents showed the system was expected to make about $6.5 million less in ticket sales in 2017 and 2018 than was forecast in a Monorail Co.-commissioned ridership study published in April 2016.
The nonprofit has not posted quarterly ridership and revenue numbers to its website since the start of 2018. It hasn’t posted a financial statement publicly since 2017.
The Review-Journal is owned by the family of Las Vegas Sands Corp. Chairman and CEO Sheldon Adelson. The Sphere is a project by Madison Square Garden and Las Vegas Sands Corp.
Contact Michael Scott Davidson at sdavidson@reviewjournal.com or 702-477-3861. Follow @davidsonlvrj on Twitter Contact Mick Akers at makers@reviewjournal.com or 702-387-2920. Follow @mickakers on Twitter.