The Michigan Strategic Fund board gave final approval yesterday for the sale of up to $450 million of 30-year revenue bonds for a downtown Detroit arena that will be home to the National Hockey League's Detroit Red Wings, Reuters reported yesterday. The financing plan calls for $250 million of tax-exempt bonds backed by increases in tax collections on real estate and personal property from the development. The bonds will be priced through underwriter Merrill Lynch. Another $200 million of variable-rate taxable bonds backed by arena concession fee payments will be privately placed with Comerica Bank. The Detroit Downtown Development Authority, which will own the arena, will hedge interest rate risk on the bonds through a swap agreement with a yet-to-be named counterparty.
