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CURRENT ISSUE:  November 5, 2007
VOL. 45, NO. 19   •   Oakland, CA
Other front page stories
 
Cathedral dedication date set
 
Global poverty must be U.S. priority declare religious leaders and activists
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.”


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