OREANDA-NEWS. November 18, 2015.  Fitch Ratings has affirmed the underlying 'BBB' rating on the following Miami-Dade County Industrial Development Authority's (IDA), Florida outstanding bonds:

--\\$97.2 million in taxable IDA revenue bonds series 2006 and 2007A (Dolphins Stadium Project);
--\\$76.3 million in tax-exempt IDA revenue bonds series 1985 A, B, C and D.

The Rating Outlook on all bonds is Stable.

The bonds were issued by the IDA on behalf of South Florida Stadium, LLC (SFS), the obligor for all debt service payments. SFSC issued \\$100 million of 2015A parity bonds through the IDA that Fitch does not rate.

RATIONALE

The affirmation at 'BBB' with a Stable Outlook reflects Sun Life Stadium's status as a premier venue in South Florida and host to the National Football League's (NFL) Miami Dolphins, the core anchor tenant at the facility since 1987, and also the strong ownership commitment to the franchise and the stadium. The vast Miami and South Florida service, though dependent on housing and tourism, supports SFSC's historically solid premium seating and corporate relationships. These strengths are offset to some degree by the 100% unhedged variable rate capital structure and high leverage when compared to other standalone stadium facilities.

KEY RATING DRIVERS

NFL'S FINANCIAL STRENGTH

The NFL's strong underlying league economics are supported by the NFL's structure, which promotes financial stability and competitive balance through a high percentage of revenue sharing and supplemental revenue sharing. The NFL's strength is further evidenced by the popularity of the sport, which maintains a robust and stable domestic fan attendance and strong viewership base. The current collective bargaining agreement (CBA) between the NFL and NFL players union that extends through 2020 provides for a lengthy period of labor relations stability. The 'hard salary' cap in the CBA also injects more cost certainty to teams.

HISTORICALLY PROMINENT FRANCHISE AND ROBUST MARKET

The Miami Dolphins maintain a stable fan and corporate base and have played in Miami since 1966. Recent economic uncertainty and team performance have caused attendance and premium seating renewals to be uneven, though trending favorably in recent seasons. As with any sports facility, the entertainment nature of sports and its vulnerability to economic downturns and team performance are inherent risks to this transaction. Miami-Dade County's solid wealth levels and demographics are viewed positively.

BROAD REVENUE PLEDGE and SOLID FINANCIAL METRICS

A high percentage of collateral is contractually obligated and consists of luxury suite revenues, club seat revenues, stadium advertising and sponsorships, concessions, annual stadium rent, parking and other revenues. Revenues from suites, club seats, sponsorships and advertising agreements are exposed to renewal risk and continued economic uncertainty. When faced with lackluster team performance, price points and renewal terms may be pressured.

VARIABLE-RATE AND ESCALATING DEBT PROFILE RISKS

Variable-rate debt exposes the credit to fluctuations in interest rates and refinancing risks. These risks are partially mitigated by adequate financial flexibility with average debt service coverage since 2008 of 3.0x. As a result of the upcoming renovation project, SFSC revised the debt amortization schedule of its existing debt, easing some near-term pressure on debt service coverage, but the overall profile still increases for the next 18 years before dropping off in fiscal year 2033.

STRONG COMMITMENT TO FACILITY REINVESTMENT

Sun Life Stadium is the most prominent outdoor venue in the Miami area. Although the facility was last renovated in 2007, the current ownership group continues to invest heavily to improve the overall fan experience and maintain Sun Life as a competitive venue, as evidenced by the current approximately \\$450 million renovation, of which over \\$250 million will be contributed as equity, \\$100 million by the 2015A bonds parity to the existing rated bonds, and \\$100 million in separate financings. To the extent that there are costs above \\$450 million, Fitch expects additional ownership equity.

PEERS: In terms of other publicly-rated sports facilities, SFS exhibits much higher leverage than LA Arena Funding, LLC (rated 'BBB+'/Stable Outlook by Fitch), the issuer of debt supporting the Staples Center in Los Angeles and the Harris County - Houston Sports Authority NRG Stadium Project home to the NFL's Houston Texans (rated 'BBB'; Stable Outlook). The Staples Center also benefits from serving three anchor tenants from the NBA and NHL, but SFS utilizes a broader revenue pledge that supports higher DSCR. SFSC is more highly leverage than NRG stadium but through SFSC renovation leverage is expected to decline to similar levels over the medium term. Compared to other stadium financings Fitch rates privately, SFS shows higher leverage on its current net revenue base, but this metric should improve with the renovation.

RATING SENSITIVITIES

Negative:

WEAK ATTENDANCE OR REVENUE CONTRACT RENEWAL: A reduction in attendance and/or weak renewals that leads to reduced financial flexibility;

SHORTER-TERM COI CONTRACTS: An increasing proportion of long-term contractually obligated income being replaced by shorter term renewals could lead to year-to-year financial volatility and create pressure on the rating;

INTEREST RATE VOLATILITY: A significantly harsher interest rate environment would have a direct impact on the completely unhedged variable-rate debt profile and could lead to a rating action. Fitch notes that SFS cash flows illustrate resilience to very stressful sensitivities applied to interest rates, aided by the new anticipated amortization profile;

POSITIVE RATING MOVEMENT UNLIKELY: Given that high leverage on the facility is expected to remain above 3x in Fitch's base case until 2028, an upgrade in the near term is unlikely.

SUMMARY OF CREDIT

Sun Life Stadium is home to the NFL's Miami Dolphins, the only professional football team in South Florida. In addition, in 2008 the University of Miami Hurricanes football team commenced a 25-year lease to play home football games at the stadium. Sun Life Stadium was formerly known as Land Shark Stadium and prior to that Dolphin Stadium, Pro Player Stadium and Joe Robbie Stadium. (For more information on Fitch's view of the NFL, please see the release titled 'Fitch Rates NFL Ventures' G-4 Notes 'A+'; Affirms Outstanding; Outlook Stable,' dated 26, June 2015, available at www.fitchratings.com.

Fiscal year ended March 31, 2015 financial statements show operating revenues were flat over the previous year while operating expenses declined by approximately 24% returning to a level consistent with previous trends. The 2014 increase in operating expenses was largely due to one-time expenses related to the pursuit of public funding for stadium improvements at the beginning of the fiscal year.

The stadium's largest revenue streams demonstrated mixed results for 2015. Club seat premiums grew by 19.6% while luxury suites premiums and stadium signage declined at 12% and 10.5%, respectively. Other event revenue was generally flat compared to 2014. Though below-par team performance over recent seasons has contributed to an increase in shorter-term premium seating contracts, another reason for this trend revolves around current plans to renovate the stadium, as longer-term contracts on seating products that might change with renovation plans have not been offered. Overall, net revenues for 2015 were consistent with Fitch's expectations for performance.

The current renovation project has current spent approximately \\$168 million through Phase I of the capital program including a new sales and data center, bowl renovation including a full seat replacement, club area construction including five new club sections and general concourse and service level improvements. Phase II expected for 2016 and Phase III expected for 2017 will include the shade canopy construction, four new HD videoboards and production controls, new LED lighting and supporting equipment, general concourse works, suite and club area renovations and site work improvements. In conjunction with the renovation, the Dolphins received approval from the NFL of the financing plan, including the \\$100 million issued through the IDA in 2015. The new debt combined with the current amortization grows from \\$8.3 million in 2017 to \\$17 million by 2031, or 5.4% annually.

In Fitch's base case scenario, including the \\$100 million 2015A IDA bonds, reflects 10% stresses applied to management's revenue uplift assumptions for premium seating and advertising following the renovation, occupancy and pricing levels remain broadly consistent with historical levels, reflecting Sun Life Stadium's ability to maintain adequate pricing power and demand over time. Under this scenario, Fitch estimates DSCR will not fall below 2.2x through the life of the debt.

Fitch's rating case includes 25% stresses applied to management's revenue uplift assumptions for premium seating and sponsorship revenue following the renovation as well as stresses applied to operating costs consistent with other Fitch-rated stadium analyses. Under this scenario, EBITDA declines over the life of the debt by 0.7%, yet, as a result, average DSCR based on pledged revenues is maintained at 1.8x through the life of the debt.

Consistent with Fitch's 'Criteria for Interest Rate Stresses in Structured Finance Transactions and Covered Bonds,' Fitch also ran a combined downside scenario to test the sensitivity of the base- and rating-case cash flows detailed above to severe and sustained increases in interest rates. In this sensitivity scenario, SFS would pay an average 8.4% interest over the life of the current debt, which is amortized fully by July 1, 2041. When this scenario was tested on the base case, minimum coverage does not fall below 1.5x. When tested on the rating case, minimum coverage does not fall below 1.1x.

SECURITY

The net revenues of SFS and a \\$2 million state sales tax rebate (which expires in 2022) secure the bonds.