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Arlington, Texas's city council is considering borrowing up to $185 million to refinance bonds sold to build the Dallas Cowboys a new stadium.

Arlington, which is helping the National Football League team finance a $1.1 billion stadium due to open next year, would sell tax-exempt, fixed-rate bonds to repay $164.3 million in variable-rate demand securities sold to pay its share of the facility, according to a plan attached to agenda for the council's meeting tonight.

Interest on the bonds rose as high as 10 percent this month from about 2 percent in June, Bloomberg data show. The council voted July 29 to authorize converting the bonds before delaying the refinancing because of credit market turmoil.

``All amounts required to make any payments'' on the bonds ``will be paid from either bond proceeds or from amounts currently on deposit and available for such purpose,'' according to a staff report to the council.

Municipal issuers have sold about $258 billion of long-term bonds, excluding variable-rate securities, this year through last week. That's down almost 17 percent from $310 billion during the comparable period in 2007, according to data compiled by Bloomberg.

Council approval would also allow the city to terminate interest-rate swap agreements involving the existing debt.

Finance costs for the National Football League's share of the stadium costs also increased because of credit market woes that have prevented many borrowers from bringing new debt issues to market.

At least four teams -- the Cowboys, the New York Giants and Jets and the New England Patriots -- financed new stadiums with auction-rate securities, long-term bonds with interest rates that reset weekly or monthly. Interest rates on the bonds reached as high as 22 percent after the market collapsed in February as Wall Street banks stopped acting as buyers of last resort for the securities.

(Source: Bloomberg)