Fitch gives A- to NBA notes

Fitch Ratings said it assigned an A- rating to Hardwood Funding LLC's roughly $129 million senior notes series GG.

Hardwood Funding is an affiliate of the National Basketball Association (NBA).

The agency also affirmed Hardwood Funding’s outstanding $2.6 billion senior notes and its outstanding $1 billion secured revolving facility due 2021 (issued through Basketball Funding LLC) at A-.

The outlook is stable.

Fitch said the A- reflects the underlying core economic model of the NBA, which has a solid level of revenue sharing and a collective bargaining agreement (CBA) that fosters competitive balance through its soft salary cap.

“The rating reflects the near-term leverage and downward trajectory on the notes and bank facility over the course of the NBA's current television contracts,” the agency explained in a news release.

“The NBA's current domestic television contracts represented an approximately 3 times (x) average annual value as compared to the prior contract. The league's recent strong attendance trends through uncertain economic times in the U.S., solid viewership and the league's formidable international growth are additional supporting factors driving the stable outlook.”

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