City Sells $354.7M of Convention Center Hotel Bonds

"The Convention Center hotel is a job generator that will ensure the success of our expanded Convention Center and the economic benefits conventions bring to Denver--tourists who spend and leave," Webb says. "Today's sale marks a major milestone in building a convention center hotel that Denver has sought since 1981."

"Technically, the bonds were sold by the agency established by the City in 2003 to own and oversee the operation of the Hotel," says Cheryl Cohen-Bader, the city's manager of revenue. "The relatively low true interest rate of 4.61% for the bonds reflects the historically low interest rate environment and the financial market's faith in the project."

"The bonds were sold in two phases," Cohen-Vader explains. "The sale of $11 million in bonds to Colorado retail investors was conducted on Monday. This allowed private, smaller investors based in Colorado the opportunity to acquire bonds. The balance of bonds were sold today to national investors."

The sale will provide about $221 million of construction funds and $23 million to close on the purchase of the property located across the street of the Colorado Convention Center. The bonds are insured by XL Capital Assurance Co. and carry credit ratings of AAA by Moody's, Standard & Poor's and Fitch Investment Rating firms.

A syndicate of nine investment-banking firms with offices in Denver participated in the sale of the bonds. U.S. Bancorp Piper Jaffray Inc. and UBS Paine Webber Inc. were co-managers on the sale. Other firms participating in the transaction were A.G. Edwards & Sons Inc., George K. Baum & Co., Harvestons Securities Inc., J.P. Morgan Securities Inc., Kirkpatrick Pettis, RBC Dain Rauscher Inc. and Stifel, Nicolaus & Co. Inc., a Hanifen Imhoff division.

The closing of the sale, whereby the funds will be provided for the project, will occur on June 25. A groundbreaking ceremony will be held at 11:00 a.m. on June 30.