Fitch Ratings on Tuesday downgraded the Robert W. Woodruff Arts Center Inc.’s underlying rating to A from AA-minus and revised the outlook to negative from stable.
The action affects $187.6 million of outstanding revenue bonds, which are an unsecured general obligation of the Woodruff Center.
“The downgrade reflects the center’s continuing, significant operating losses, which have largely been addressed through more aggressive investment allocations to less liquid alternative asset classes rather than through core changes to the center’s business model,” said a report by analyst Mary Catherine Messner.
Because of continuing deficits and valuation declines in a less liquid portfolio, the center’s liquidity levels were not consistent with the AA rating category, she said.
“Further credit stress is created by the center’s aggressive use of variable-rate debt, which is supported by external liquidity agreements, four of which need to be renegotiated over the next five months,” Messner said.
The negative rating outlook reflects the limited ability of the center over the next few years to reverse negative operating trends in the current economic environment, she said.
The Woodruff Center is a nonprofit corporation whose main campus is located in Atlanta. It has four operating components — the Alliance Theatre, Atlanta Symphony Orchestra, the High Museum of Art, and Young Audiences, Woodruff Arts Center.
