Fitch rates NBA notes, loans BBB+

Fitch Ratings said it assigned a BBB+ rating to the National Basketball Association's $858 million league-wide revolving facility borrowings, privately placed through its affiliate Basketball Funding, LLC, and a BBB+ to $162.5 million of senior notes due in 2019, 2021 and 2024, privately placed through its affiliate Hardwood Funding, LLC.

The agency affirmed at BBB+ the NBA's $1.24 billion of senior notes, various issues due through 2020, privately placed through its affiliate Hardwood Funding, LLC.

The outlook is stable.

Proceeds of the new senior notes will be used for general corporate purposes, including the refinancing of the series D senior notes maturing June 7, 2012. The revolving facility, which was formerly renewable annually, was last renewed in December 2010 with a current maturity of May 2014. The new facility will have a five-year tenor.

The ratings reflect solid underlying league fundamentals, debt service supported by large contractual revenue streams from investment-grade counterparties, new collective bargaining agreement with strengthened core elements that promote financial stability and competitive balance, and stable domestic fan attendance and viewership and growing international fan base, the agency said.

Structural provisions ensure timely debt service but the debt obligations are several commitments of participating clubs, and a bankruptcy of an individual team could cause a disruption in debt service payments, the agency noted.

This risk is partially mitigated by the league letter of credit and league's oversight and governance, Fitch said.

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