Standard & Poor's Ratings Services said it has lowered its long-term rating to D from CC on the Please Touch Museum (PTM), Pa.'s series 2006 revenue bonds.
"The D rating reflects PTM's failure to pay full principal and accrued interest to bondholders following a Trustee notice of immediate acceleration of the bonds," said Standard & Poor's credit analyst Nick Waugh.
Under the terms of the indenture, if an event of default has not been cured within 10 days of written notice to the museum, the trustee may, and shall upon written request of the owners of 25% in principal amount of the bonds outstanding, declare the principal of all bonds then outstanding to be due and payable immediately.
Events of default previously noted by the trustee have not been cured, more than 10 days has passed since the events of default were shared with the museum in February 2014, and the trustee has received written direction from the owners of a majority in principal amount of the bonds outstanding to accelerate the bonds under the indenture.
A notice of the continued defaults and a declaration that all principal and interest accrued are immediately due was posted on Electronic Municipal Market Access (EMMA) on June 10, 2014.
PTM has approximately $58 million in principal outstanding. PTM has not made a payment in full since the notice of immediate acceleration, and it is not expected that the museum will make a payment in full because it lacks sufficient assets to pay full principal and accrued interest. The lack of full payment following the immediate acceleration, and the expectation that the museum will not make a full payment in the near term led to the D rating.
