The venerable American Museum of Natural History is planning to sell up to $195 millionof refunding bonds through the New York City Trust for Cultural Resources as early asthis month.
The issuer will hold a public hearing on the sale on April 15, as required by law, afterwhich it can proceed with the pricing. Morgan Stanley is senior manager. An officialthere said the deal could price as soon as the week of April 19.
The museum, which is technically a not-for-profit education corporation, is proposing torefund $120 million in two series of 1999 bonds as well as $27.5 million in 1997 bondsand $25 million in 1991 bonds. All of the debt is triple-A insured, with Ambac AssuranceCorp. backing the 1999 bonds and MBIA Insurance Corp. backing the 1997 and 1991 debt.
The $195 million in authorization will permit it to sell premium bonds if need be andcover cost of issuance.
The original bonds were sold for the museum and the museum's planetarium authority,which is a public benefit corporation. According to a recent Moody's Investors Servicereport, the museum has invested more than $400 million in its plant and infrastructuresince 1997 and has completed a major capital program.
The museum, Moody's said, has in all $271.3 million in debt. Moody's rates theunderlying credit on the debt A1. "We believe that the museum's demonstrated ability toattract substantial private gifts will help sustain future credit quality," the ratingagency said in a report on March 18.
The American Museum of Natural History was founded in 1869 and is located on the UpperWest Side in Manhattan. It is perhaps best known for its permanent dinosaur fossilexhibit and in 2000 opened the Rose Center for Earth and Space, which includes theHayden Planetarium.
The museum has proposed a final maturity of 32 years on the refunding debt, Moody'ssaid. "While this restructuring will alleviate some of the operating pressures of themuseum in the near term, we believe that extending the life of the debt is a significantrestriction on future management's flexibility."
Moody's said it does not anticipate any additional borrowing.
The New York City Trust for Cultural Resources is controlled by the mayor's officethrough the New York City Industrial Development Agency. With this deal, the little-usedtrust is on track for a record year, already selling $115 million in the first quarterin two deals - $65.5 million in new money for the Wildlife Conservation Trust and $50million for the Pierpont Morgan Library.
