Relevant Documents:
Notice (Unscheduled Draw)
Notice (CAFR 2020)
Notice (Letter)
Issue Page (Series 2017A)
Trustee U.S. Bank posted a notice to EMMA today disclosing a draw today from funds in various accounts to cover July 1 interest payments on Series 2017 bonds issued by Austin Convention Enterprises Inc. in connection with the refinancing of the Austin Convention Center Hotel.
Continue reading as our Americas Municipals team provides an update on the Trustee U.S. bank situation and Request a Trial here for access to the linked documents as well as our analysis and reporting on hundreds of other stressed, distressed and performing credits.
The trustee disclosed that it transferred $2.47 million to the first tier debt service account of the debt service fund in order to provide sufficient funds to pay $2.95 million in interest due July 1 on the Series 2017A first tier revenue refunding bonds, including $2.05 million from the operating reserve fund and $235,416.86 from the first tier debt service reserve fund.
The trustee today also transferred $1.2 million from the second tier debt service reserve account to the second tier debt service account of the debt service fund to provide sufficient funds to pay $1.2 million in interest due July 1 on the Series 2017 second tier revenue refunding bonds, according to the notice.
Austin Convention Enterprises also posted its earnings for the fiscal year ended 2020 on EMMA today, reporting revenue of $21.7 million, down from $79.9 million in fiscal year 2019. The company disclosed its occupancy rate was 22.7% during FY 2020, compared with 74.4% during FY 2019. During FY 2020, the average daily rate was $190 and the revenue per available room was $43. This is down from an average daily rate of $234 and revenue per available room of $174 during the prior year. The earnings report says that “these decreases in all performance metrics reflect the loss of revenue due to the Covid-19 pandemic and its effect on the hospitality industry.”
Reorg calculated adjusted EBITDA for the full-year 2020 was negative $1.9 million, compared with $32.4 million in the prior year.
Austin Convention said it “has seen a recovery during the months of March 2021 through May 2021,” citing:
- Outperforming budgeted expectations for operating revenue;
- Occupancies for March 2021 through May 2021 exceeding 30% with the return of weekend leisure travel as the driving force; and
- Actual revenue is creating consistent, positive margins in contrast to full-year 2020 and successive months this year have produced increasingly optimistic projections to year-end.
The company also disclosed that it has continued to update its analysis of the adequacy of remaining reserve balances through January 2023 and that the balances in reserve accounts are sufficient to cover 2021's remaining debt service payment scheduled for July as well as the full debt service payment in January 2022. Its revenue is expected to be sufficient to cover debt service payments in July 2022 without usage of any reserves.
The company reported cost of revenue of $11.7 million during fiscal year 2020, compared with $29.5 million in the prior year.
G&A expenses were $4.2 million during fiscal year 2020, down from $5.5 million in the prior year.
Sales and marketing expenses were $2.2 million during FY 2020, down from $6.7 million in the prior year.
During fiscal year 2020, the company used $3.8 million of net cash used in operating activities and generated $19.7 million of cash flows from investing activities. During FY 2019, the company generated $32.4 million of cash flows from operating activities and generated $4.7 million of cash flows from investing activities. Austin Convention includes interest received, investment purchases and investment sales in its calculation of cash flows from investing activities.
The company had total long-term debt of $191.5 million and cash and cash equivalents of $3.2 million in FY 2020. During FY 2019, the company had total long-term debt of $202.2 million and cash and cash equivalents of $7.3 million.
Subsequent to the fiscal year ended 2020, Austin Convention
disclosed that in April 2021, two amendments to the indenture were approved by the majority of the bondholders, the trustee, the company, and Hilton, which provided additional resources from restricted assets to fund operating expenses. The first amendment permitted the company to apply for a paycheck protection program loan, which it applied for and received funding in the amount of $2.2 million. The second amendment enabled the company to utilize funds in the excess revenue reserve fund and the supplemental renewal and replacement fund for administrative and operational expenses for the two-year period ending March 31, 2022.