1. Oakland Diocese Wins Investment Grade for Cathedral Financing
By Jeremy R. Cooke
Oct. 12 (Bloomberg) -- The Roman Catholic Diocese of Oakland, California, received an investment-grade rating of
A3 from Moody's Investors Service for a planned $110 million financing to pay for work on its new cathedral.
The 407,000-member diocese plans to privately place 10-year taxable bonds with Deutsche Bank AG to help
construct the Cathedral of Christ the Light and other capital projects, said Patrick D. O'Meara, managing director of
O'Meara Ferguson Kearns Inc. of Reston, Virginia, the diocese's financial adviser.
Oakland joins ``less than a dozen'' of the 185 Roman Catholic dioceses in the U.S. that have tapped the debt
market with investment-grade ratings in recent years, O'Meara said.
Dioceses can sell tax-exempt debt for schools, social services and other community facilities. Oakland's deal is
taxable because it will fund church building. The new $180 million cathedral, to be completed next year, will replace
the old central church lost to the 1989 Loma Prieta earthquake.
The diocese, which collects revenue from gifts, school tuition and cemetery and mortuary sales, will have $114
million of debt after the latest financing closes, Moody's said.
Strengths that Moody's cited include 45 years of history since it split from the Diocese of San Francisco, an
operating margin of 9 percent and ``solid'' donations that averaged $20 million in the past three years.
Challenges include a ``substantial'' borrowing ratio, ``modest'' financial resources and the possibility of future
sexual-abuse lawsuits, mitigated by a $56 million settlement reached in 2005, the New York-based rating service
said.
To contact the reporter on this story: Jeremy R. Cooke in New York at jcooke8@bloomberg.net .
Last Updated: October 12, 2007 17:01 EDT
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