MOODY'S DOWNGRADES RATING ON SAN DIEGO NATURAL HISTORY MUSEUM'S SERIES 1998 CERTIFICATES OF PARTICIPATION TO Caa2 FROM B1; OUTLOOK REVISED TO NEGATIVE FROM STABLE

Posted on: December 10, 2009, 1:03 pm

NEW YORK, Dec 10, 2009 -- Moody's Investors Service has downgraded to Caa2 from B1, the rating on San Diego Natural History Museum's (the "Museum) Series 1998 Certificates of Participation (COP) issued through the County of San Diego and has revised the outlook to negative from stable. The downgrade and outlook revision reflects Moody's ongoing concerns about the financial health of the Museum. Despite optimism that recently successful visiting exhibits might stabilize operating margins and boost liquidity, forecasts for FY2009 have not been met and operations remains weaker than expected. The Museum has also been reliant upon an operating line of credit which is fully drawn and expired on October 31, 2009. The Museum is currently negotiating terms for repayment. Should the Museum be unable to negotiate favorable terms, more significant financial pressure could be realized leading to additional pressure on the rating. The legal structure of the bonds is also relatively weak, with no mortgage or deed of trust on the land or building occupied by the Museum, but a security interest in gross revenues of the Museum's operations. There is a debt service reserve fund...

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