Austin Mobilizes Top Banks for $650M Convention Center Bond Initiative

Austin is mobilizing a high-powered finance team as it prepares to tap the bond market for the first tranche of its $1.6 billion “UnconventionalATX” Convention Center expansion.

Bank of America will lead underwriting on the Special Tax Revenue Bonds (Series 2025) as Senior Manager, supported by Mesirow as Co-Senior Manager and Hilltop Securities and Loop Capital as Co-Managers. PFM Financial Advisors LLC has been named municipal advisor, with Norton Rose Fulbright US LLP and Orrick, Herrington & Sutcliffe LLP taking bond and disclosure counsel roles, respectively.

To enable timely market execution, the City has delegated pricing authority to its City Manager, CFO, or Director of Financial Services through October 23, 2026.

Debt Structure Targets Market Flexibility

The ordinance authorizes up to $650 million, structured across a two-tier lien system designed to optimize investor demand:

• Senior Lien Bonds (Series 2025A): Up to $525M

• Junior Lien Bonds (Series 2025B): Up to $125M

This is the opening move in a planned three-year financing cycle expected to cover roughly $1.2 billion of the $1.6 billion project cost, with the balance coming from cash reserves.

Tourism Revenues Drive Repayment — Not Property Taxes

In line with Texas state law, bondholders are barred from seeking repayment from property taxes. Instead, the bonds will be backed by gross pledged revenues after the City issues separate Prior Venue Lien Revenue Refunding Bonds.

Pledged revenues include:

1. 4.5% Hotel Occupancy Tax (HOT)

2. 2% HOT under Texas Tax Code Ch. 351, approved in 2019

3. State Project Finance Zone (PFZ) increment revenues, established in 2024

Both senior and junior lien bonds may draw from the same HOT and PFZ revenue sources. Each series will be further supported by a debt service reserve fund equal to one year of payments, providing additional credit strength.

Debt service and administration fees beginning FY 2026 are already budgeted under the Convention Center Hotel Occupancy Tax Revenue Bond Redemption Fund.