July 27, 2020 – As reopenings in California and Sun Belt states are halted, S&P Global Ratings said today it would closely monitor credit developments for convention centers and sporting authorities.

With social distancing dramatically reducing demand for conferences, sporting events and mass gatherings, the rating agency opined many issuers will have no choice but to further reduce costs and scale back operations.

Given the fragment regulatory framework, regional variations in crowd sizes and other COVID-19 mitigation actions will also be rampant.

Over the past few months, S&P Ratings downgraded several large convention issuers including Washing State Convention Center (BBB+ from AA-) and the Las Vegas Convention & Visitors Authority (A from A+). The outlook for both entities is “negative”.

S&P analysts cautioned issuers’ security structure varies a great deal from issuer to issuer – some entities rely on operating revenues while others may receive tax revenue supports in the form of county-wide hotel taxes or even sales taxes.

“Not all authorities are created equal”, the analysts said. “If you’ve seen one, you’ve seen one”.

Contact Jumanne Johnson at JJohnson@buymuni.com