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| CURRENT ISSUE: November 5, 2007 VOL. 45, NO. 19 • Oakland, CA |
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Diocese earns A3 credit
rating from Moody’s Service |
Moody’s Investor Service, a leading credit rating company, has given
the Oakland Diocese an A3 rating. This means that the diocese has the
financial strength to provide for its construction needs and to obtain
funding through debt markets that were previously out of reach, said Michael
Canizzaro, chief financial officer for the diocese.
Specifically, the rating will allow the diocese to restructure its existing
debt including payments for the construction of the Cathedral of Christ
the Light Center and provide additional funds for construction projects
in parishes and diocesan cemeteries
Oakland is the first California diocese to obtain a Moody’s rating.
Five other dioceses in the U.S. — Arlington, Virginia; Austin, Texas;
Houma-Thibodaux, Louisiana; Indianapolis and New Orleans — also
are Moody-rated.
According to Canizzaro, the diocese intends to issue a bond of approximately
$110 million. Moody’s said such action should “not significantly
impact the diocese’s credit.” Details of the bond issuance
were still being negotiated at press time, but Canizzaro said the Moody’s
rating, issued Oct. 12, will allow the diocese to go outside of its traditional
banking relationships to refinance the debt.
A significant amount of the funds will be used to complete the construction
of the Cathedral Center. To date, gifts and pledges for the cathedral
have reached over $100 million towards the estimated cost of $190 million.
The diocese has contributed approximately $26 million and borrowed another
$15 million for the project.
Canizzaro expects additional funding to complete the project will come
from the sale of properties owned by the diocese, including its central
offices on Lakeshore Avenue in Oakland, as well as investment earnings
and additional donations.
“The diocese will be refinancing at the lowest possible rate with
the best possible terms, but it will have an obligation to repay the debt,”
said Canizzaro. “We are counting on the generosity of the people
of the diocese to cover the debt.”
In issuing its A3 rating, Moody’s cited the diocese’s long-established
presence in the East Bay, its “solid fundraising profile”
and its “favorable operating performance.”
However, it also noted several challenges, including uncertainty about
further legislative attempts to waive the statute of limitations on sex
abuse claims and “modest financial resources.”
