June 25, 2019
The Wisconsin Legislature voted today to accept “moral obligation” to back up Wisconsin Center completion project bonds, securing investor confidence and enhancing the Wisconsin Center District’s borrowing rates and capacity.
Moral obligation underwriting is a pledge by the State to appropriate money toward unmet WCD debt obligations in the unlikely event the District is unable to do so. Similar underwriting has been done for other projects such as Miller Park and Lambeau Field; no such project has ever needed to seek such recourse to avoid default.
The move by state lawmakers helps WCD put a financing deal together, by making it cheaper to borrow money.
“It causes the financial institutions to look more favorably at the entity that they’re providing funds to, because the state is saying we will be the back-stop that if, for some reason the WCD should not be able to make its payment, the state comes in,” said WCD President & CEO Marty Brooks.