How a San Francisco science museum refinanced $281.5 million

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San Francisco’s California Academy of Sciences is refinancing $281.5 million in bonds in a deal that will restructure all of its existing debt.

The academy, which includes an aquarium, planetarium, and natural history museum at Golden Gate Park, will save as much as $6 million over the next three years, according to Doug Brown, a director in Wells Fargo Securities’ Public Finance group, which led the structuring and marketing of the bonds through conduit issuer California Infrastructure and Economic Development Bank.

The tax-exempt bonds priced Tuesday with the deal to close Aug. 1.

"We had a nice book of business with at least 25 different firms putting orders in which enabled us to tighten down the spread," Brown said.

The Series 2018 bonds, which include four in floating-rate index mode that mature in 2047, have a mandatory tender date in 2021.

The bond counsel is Hawkins, Delafield & Wood.

Ryan Diamond, director of finance at the academy, said it’s a great time for the institution to refinance and realize savings.

“Because it’s reducing our costs we can focus all of our philanthropy (revenue) and our ticket sales into the facility and the experience to visitors versus putting it into interest,” Diamond said.

Moody's Investors Service assigned an A2 rating and a stable outlook to the academy.

"The Academy's position as one of the Bay Area's leading cultural organizations, its governance and financial relationship with the City and County of San Francisco (Aaa stable), and good fundraising are also key supporting credit factors," the agency stated.

The academy is paying off bank-held debt used to finance the construction of its current facility, which opened in 2008.

The project brought the aquarium, planetarium and natural history museum under one roof, after its 12 older buildings were damaged in the 1989 Loma Prieta earthquake.

The academy, which was founded in 1853, offers interactive science exhibits and environmental literacy programs attracting more than 1.5 million visitors a year.

“The California Academy of Sciences is one of San Francisco’s cultural gems,” Brown said. “We are honored to work with an institution that has brought so much joy and discovery to the Bay Area’s residents and visitors alike — my family included.”

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Primary bond market Variable-rate bonds California