Banks that provided roughly $400 million in loans to the New York Mets are starting to unload some of that debt at a discount, a sign that creditors are getting nervous about the team’s finances, The Post has learned.
Potential buyers are bidding around 90 cents on the dollar for the debt, sources said. At least one creditor has bought a debt slice at a discount with the approval of Major League Baseball, which must sign off on any buyer of the team’s loans, said one source.
“This tells me the original lenders are scared,” a source close to the situation said.
Last year, JPMorgan Chase, Bank of America and Citigroup refinanced a $430 million loan to the club despite concerns that the Mets owners, the Wilpons, were exposed to convicted fraudster Bernie Madoff.
Mets COO Jeff Wilpon said yesterday that his family will maintain majority ownership of the team despite a $1 billion lawsuit from trustee Irving Picard trying to claw back money for Madoff victims.
His confidence is evidently not shared by the team’s lenders.
The Mets are roughly breaking even before interest payments. But the team owes $30 million in annual interest payments plus roughly $50 million a year to pay down stadium bonds.
One source said MLB is holding up trading in the loans because of concerns that vulture investors will snap up the debt and force the team into bankruptcy — just like they did last year to the Texas Rangers.
“[MLB] is being very difficult,” the source added.
Meanwhile, the Citi Field bonds, whose debt is already rated “junk,” are starting to trade at prices that also indicate trouble — in the mid-60-cent range, said one source.
The Wilpon-family owned Queens Ballpark Corp. pays the interest on the bonds to the New York City Industrial Development Agency, which owns Citi Field. If the Wilpon family fails to make payments, the city is not on the hook to pay bondholders, sources said.
The Mets, including the stadium debt, owe lenders more than the $850 million that sources believe the team is worth.
The Wilpons may have a hard time bundling their share of profitable cable network, SportsNet New York, in a team sale as SNY co-owners Time Warner and Comcast have the first right to buy their stake.
JPMorgan declined to comment and MLB did not respond by press time.