Art Institute of Chicago sells bonds to shore up employee pensions
BY DAVID ROEDER Business Reporter October 9, 2012 7:10PM
Updated: November 11, 2012 6:29AM
The Art Institute of Chicago is selling $101 million in bonds to shore up its employee pensions.
Moody’s Investors Service is giving the bonds an A1 rating, its fifth highest grade, with a stable outlook. The ratings service said the museum enjoys a “sold market position” because of its international renown and a commitment to paying down its debt.
The Art Institute is expected to retire $94 million in debt over the next three years and plans no additional bond issuances, Moody’s said.
Potential trouble, the Moody’s report said, include relatively high indebtedness of about $295.2 million with the new bonds and the possibility that economic trouble could lower visitor counts and enrollment at its art school.
The museum’s pension and retirement obligations total $64.5 million. Bloomberg News said the plans are 65 percent funded.
The bonds include $40 million that are taxable and $61 million that are tax exempt. Moody’s said the sales are expected Thursday.