Securitization Ices N.Y. Islanders Purchase Accord
August 30, 1999
A sale of National Hockey League's New York Islanders by a three-party investment group will likely include securitization to help finance a significant part of the purchase price, one of the team's potential new owners said.
Robert D'Loren, president and COO of CAK Universal Credit Corp., and an innovator in extending the application of asset securitization to new cash flows, is playing a pivotal role in structuring the transaction, which includes him and two other parties that have stepped up collectively to buy the hockey team.
He said the group has a signed letter of intent to purchase the Islanders and is currently engaged in completing the "due diligence" to close the transaction. This process has been ongoing for a while, with an eye toward completing the purchase before the new season begins in October, he added.
D'Loren said about $150 million of the purchase price would be financed with the sale of asset-backed bonds that would be securitized primarily by payments on the team's contract with cable company Cablevision Systems Corp. He declined to give the total purchase price for the team, but some reports put the total price at $180 million at a minimum.
Former Madison Square Garden president Robert Gutkowski is one of the purchasers, D'Loren acknowledged, but he would not reveal the name of the third member of the group that is buying the team from current owner Howard Millstein.
The new owners also anticipate entering into negotiations with Nassau County, N.Y., on building a new arena for the hockey team. Considerable controversy prevailed for much of last season as the team sought to terminate its contract to play in Nassau County Veterans Memorial Coliseum.
Though a new arena would be a county project, particulars would be subject to negotiations with the new team owners, and D'Loren said a new facility would present a lot of additional securitization opportunities.