CHICAGO — The Chicago-based Poetry Foundation won a one-notch upgrade in its rating to Aa3 from Moody's Investors Service in recognition of the successful completion of its new headquarters with little impact on its strong balance sheet.
The action impacts $14.7 million of outstanding debt sold in 2010 through the Illinois Finance Authority. The outlook is stable.
The foundation successfully opened its new headquarters building and seamlessly integrated building expenses and debt service without disruption to its historically positive operations during a weak economy, Moody's wrote.
"The foundation has maintained extraordinary balance sheet coverage of debt and operations with highly liquid resources," Moody's said. "In addition, its strong fiscal oversight, flexible operations and conservative investment management add considerable credit strength at the Aa3 rating."
The foundation had total financial resources of $187.3 million in fiscal 2012 of which $163.3 million was unrestricted and covered debt by 11.1 times. The foundation is the beneficiary of five Lilly Trusts, with over $191 million received to date. The foundation is on tap to receive about $5.7 million annually through 2018, and thereafter $750,000 annually until 2032.
The foundation was established in 1912 and it benefits from an internationally recognized niche as the publisher of "Poetry" magazine — the oldest magazine in the English-speaking world devoted to poetry — as well as the expansion to other media, including television, to promote the presence of poetry in culture.
The rating is limited by the foundation's small size and high dependence on investment income to support operations. It has total operating expenses annually of $8.7 million.
Bond proceeds financed the foundation's acquisition and renovation of a new downtown administrative headquarters that offers performance space and also houses its archives and collections.