Boys Town, Nebraska, has a polished legend, having inspired the 1938 film starring Spencer Tracy about Father Edward J. Flanagan's founding of a sanctuary for troubled kids.
In 1979, girls joined the population of Father Flanagan's Boys' Home, which dates back to 1917 and has kept its residential care community campus at its current location, just west of Omaha, since 1921.
The Boys Town mission has since grown to include a pediatric research hospital, the expansion of which will be funded by a $317.7 million bond deal this month.
The bonds will be issued by the incorporated Village of Boys Town on behalf of borrower Father Flanagan's Boys' Home and guarantor Father Flanagan's Fund for Needy Children, a nonprofit corporation controlled by Boys Town.
James Lahay, managing director at underwriter Stifel, said he and his team "fully expect" the bonds to price Jan. 15.
"The single bullet maturity fits appropriately with the overall goals and the ongoing capital campaign funding," he said by email, noting that this bond structure was used in previous Boys Town deals.
The Series 2026 bonds are rated AA-minus by S&P Global Ratings after a two-notch downgrade in November.
S&P said the downgrade stemmed from the "material anticipated new debt." The Series 2026 bonds will bring the borrower's total debt to $454.79 million, from $87.57 million as of Dec. 31, 2024, and will lower the ratio of unrestricted net assets to indebtedness to 3.4x from 11.46x as of June 30, according to an online investor presentation.
In November, the Lincoln Journal Star reported that at least
Recent years have brought reckonings for the sexual abuse of children who were in the care of institutions, driving
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Bridgette Renbarger, EVP of finance and CFO for Father Flanagan's Boys' Home, did not respond to requests for comment, nor did others in her office. Emails to media spokespeople for Boys Town went unanswered.
Any known pending or threatened litigation, investigation or proceeding has probable ultimate recoveries and estimated costs and expenses of defense that would fall "entirely within the Borrower's or the Guarantor's self-insurance and insurance policy limits," the preliminary official statement says.
In fiscal 2024, public donations made up nearly 30% of the Boys Town fund's total annual revenue, according to CharityWatch, a Chicago-based accountability nonprofit.
"When a charity suffers a scandal, it almost always has some impact on its donations," Laurie Styron, CEO and executive director of CharityWatch, said by email. "The extent of that impact largely depends on the nature of the scandal, the amount of money involved… and whether the charity's management and board do a good job on damage control by taking responsibility."
Sexual abuse claims are "particularly concerning," she said, because unlike other types of scandals, "they raise questions about the safety and quality of the charity's programs. The very mission of the charity comes into question versus only the stewardship over its finances."
Styron pointed to the bankruptcy of Boy Scouts of America after allegations of abuse through that organization multiplied.
When the
And when two California laws changed the statute of limitations for survivors of child sexual abuse, the Los Angeles Unified School District sold judgment bonds to deal with the
The POS includes typical language about the effects of a potential bankruptcy on the security as among bondholders' risks.
Other risks listed for bondholders include the impact of tariffs; risks from another pandemic or health emergency; the fact that principal does not amortize prior to maturity, similar to Boys Town's Series 2017 and Series 2020 bonds; the lack of a debt service reserve fund; the lack of a mortgage securing the bonds; and the risk of early call.
The borrower's income from the provision of health care services is also listed as a risk. In fiscal year 2024, it got 35% of its revenues, or $211 million, from healthcare services at Boys Town National Research Hospital, which operates the hospital and eight outpatient clinics in the Omaha metro area.
The proceeds of the Series 2026 bonds will help fund construction and equipment of two new hospital wings in a $293 million expansion, with 135,000 square feet for hospital facilities and 122,000 square feet going to research laboratories and clinical spaces. Most of the remaining proceeds will build a new elementary school on the main campus in Boys Town.
The groundbreaking for the hospital expansion was in November 2025, with a targeted completion date in 2028.
In its rating report, S&P noted that Boys Town's operating margins improved in fiscal 2025, "driven primarily by increases in net patient service revenue and reductions in operating expenses."
Underscoring that Boys Town's focus is shifting to healthcare services are the enrollment numbers at the two schools on its campus, a proxy for enrollment in its "family-style" group homes.
The Boys Town group homes accept children ages 10 to 18. Children living in that setting are educated at Wegner School (grades 5-8) and Boys Town High School.
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Boys Town is growing its National Research Hospital, which served 47,200 children and adolescents in 2024, according to the investor presentation.
Its programs for troubled youth extend beyond the Boys Town campus to include outpatient and in-home services in the Omaha region. It has also expanded services across the country. Programs Across America served 19,100 youth at seven sites in Florida, Louisiana, Nevada and New England in 2024, according to the online investor presentation.
The organization's total revenues dropped as operating expenses rose from fiscal year 2023 to fiscal year 2024.
Boys Town has an annual operating budget of $520 million for 2026, with a supporting trust fund of $1.1 billion as of Dec. 31, 2024.
Boys Town's annual comprehensive financial report
That meant the Nebraska/Iowa services and home campus education made up 14.63% and 5.5%, respectively, of its $567.6 million in total expenditures. That's compared to the 46% of total expenditures that went to the hospital.
According to the investor presentation, Boys Town draws funding from over 1 million donors per year. Its flagship campus services for troubled youth are still the backbone of its
"Boys Town has numerous practices in place to monitor and ensure the safety of all youth; in fact, we even have our own police department," the Boys Town website states. "Every child in our care is encouraged to talk to a trusted adult at Boys Town anytime they feel unsafe."
S&P said its rating on the Series 2026 bonds "reflects our opinion of BT's reputation as a nationally recognized not-for-profit," among several other factors.
CharityWatch's Styron said Father Flanagan's Fund had 2.88 years of available assets on hand at fiscal year's end 2022, earning it a C-plus rating from Charity Watch. (The fund sued Charity Watch's predecessor organization in 1994 after the latter gave it an F grade for its stockpiling of assets.)
She noted that the fund "could face difficulty maintaining donations" depending on how the abuse allegations are handled.
"Charities like Boys Town rely heavily on contributions from the public to support their work, which is why it is so incredibly important for them to maintain public trust," Styron said.
