Munis helped bankroll the World Cup, but will cities benefit?

Although host cities received federal funding, municipal bonds were instrumental in allowing cities to expand infrastructure needed for hosting World Cup games.

Some believe the investments will benefit the host cities for years; others think these investments could hurt the cities' bond ratings.

"Across 11 host cities, municipal bonds are financing the expanded infrastructure needed to welcome the world ? while delivering tax-exempt yields to investors and long-term community benefits," Nuveen's head of municipals Daniel Close and head of municipal research and portfolio manager Margot Kleinman wrote in a report.

These cities have relied on municipal bond capital to service four key areas: transit and ground transportation improvements, airport upgrades, convention and broadcast infrastructure, and urban connectivity and community infrastructure projects.

"The World Cup was not the impetus for the infrastructure investments undertaken but rather was a powerful accelerator for it," Kleinman said in an interview. "The cities that have benefited most are those that used the tournament as a catalyst to advance infrastructure projects their communities had long needed."

The type of bonds issued varied. Cities and authorities issued a mixture of general obligation and revenue bonds ? including sale tax and hotel occupancy bonds ? often tied to projects with long-term benefits.

Some examples she cited: The Massachusetts Bay Transportation Authority (MBTA) issued $777 million senior sales tax bonds and used $35 million of it to finance a new platform outside of Gillette Stadium. The Houston Airport System issued $700 million in subordinate lien revenue bonds for renovations. The New Jersey Transportation Trust Fund Authority issued more than $1 billion in transportation program bonds to upgrade the state's transportation capabilities.

Kleinman also mentioned the impact munis have had in Kansas City ($63 million in GOs in April 2025), Dallas ($1 billion bridge loan in August 2025) and Atlanta ($105 million in bonds in 2024).

"Issuers that have incorporated World Cup projects into broader, multi-year capital programs ? rather than treating them as isolated event-driven expenditures ? are generally better positioned to maintain strong ratings and market access over time," Close and Kleinman wrote.

Still some issuers denied a direct relationship between the World Cup and the bonds.

Kansas City's muni bonds contributed to needed infrastructure improvements that will have a life of more than 30 years;" however, there is no stated tie to the World Cup, Unified Government of Wyandotte County and Kansas City CFO Shelley Kneuvean said.

The MBTA offered a similar response regarding the use of the capital from its muni bonds.

"These bonds will be used in part to fund a portion of the MBTA's Capital Investment Plan (CIP) among other uses," MBTA Deputy Press Secretary Lisa Battiston wrote in an email.

"The 2026 FIFA World Cup offers a compelling lens through which to view the municipal bond market's vital role in shaping the communities where Americans live, work and gather," Close and Kleinman wrote. "The infrastructure financed in preparation for this summer's tournament reflects the enduring power of municipal bonds to transform near-term needs into long-term community assets."

On the other hand, Andrew Zimbalist, a Smith College economics professor, voiced concern about the embrace of debt securities coupled with the cost of hosting the World Cup.

FIFA does not share profits from the Cup with the host cities, he explained. As a result, the cities are essentially incurring all costs that come with managing the thousands of tourists attending the events, while banking on them producing enough revenue to justify those costs.

"You have cities that are incurring sometimes well over $100 million in expenses," Zimbalist said. "On the other hand, they might be getting and might not be getting some net tourism revenue, so the cities are having to borrow the difference between those two sums."

When the event concludes, he believes, if you compare the hotel occupancy rates in 2025 to those in 2026 amongst host cities, "you'll find in many cases the net effect is negative."

While FIFA sells the theory that the international exposure host cities receive will eventually increase tourism and business, Zimbalist said, "There's very little evidence that that stuff happens."

Zimbalist voiced concern about the potential impact to bond ratings.

"If a city all of a sudden has to go out and borrow $40 million or whatever the number might be ? particularly in cities whose bond ratings ... were marginal, they could drop," he said.

Kleinman disagreed. Credit rating downgrades are unlikely since the host cities have not taken on significant debt to finance single-use infrastructure solely for the event; issuers are using the World Cup improvements as part of multi-year capital programs; and these cities' fiscal strength is independent of the event, she said.

The World Cup could bring positive attention to the muni market, which may support investor interest and "modestly bolster demand," she said.

The heightened public profile of these projects allows advisors and investors to better communicate the value of muni bonds, and the World Cup acts as a reputational endorsement of these cities' creditworthiness and the large-scale well-rated deals bring great attention to the issuers, Kleinman said.

She painted a very positive picture for the future of these cities, stating, "the overall revenue picture for these bond deals is strong."

"The tournament's financial success or failure is largely irrelevant to bondholders," she said. "What matters is whether these cities continue to manage their finances prudently, whether their tax bases remain healthy, and whether the infrastructure they have built continues to serve its communities effectively."

Portfolio strategist George Smith believes the overall economic burden faced by U.S. host cities will vary, while the overall impact to the U.S. economy will be "negligible."

"The utilization of existing assets materially lowers the bar for economic success," Smith said. While the tournament is still expected to cost roughly $13.9 billion, it remains far below levels seen in recent cycles and significantly reduces the risk of underutilized 'white elephant' stadium projects."