The California Infrastructure and Development Bank sold $126.7 million in bonds on behalf of the Academy of Motion Picture Arts and Sciences to refund a previous issuance by the Academy.
The bonds mature between 2024 and 2041, yielding between 2.96% and 4.14%. They received a rating of Aa2 from Moody’s Investors Service.
Moody’s said the rating “reflects the Academy’s exceptional unrestricted liquidity and favorable operating performance” and “incorporates its excellent market position in the entertainment industry, with favorable revenue predictability through long-term contracts to support the annual production” of the Academy Awards, also known as the Oscars.
The Academy has sought to diversify its revenue base in recent years beyond the media rights associated with the Academy Awards. In 2021, it opened a museum in Los Angeles, the Academy Museum of Motion Pictures. Expenses associated with opening the museum have thus far exceeded revenue. Last year, the museum generated $23.7 million in revenue and $93.5 million in expenses.
Proceeds from the issuance will refund Series 2015A bonds issued by the bank on behalf of the Academy.
The California Infrastructure and Development Bank is a state-owned authority aimed at financing “public infrastructure and private development that promote a healthy climate for jobs, contribute to a strong economy and improve the quality of life in California communities,” according to its website. The bonds are limited obligations of the bank, payable by Academy revenue.
Wells Fargo Bank, NA, served as underwriter on the issuance, purchasing the bonds for more than $139 million. The price reflected a premium of $13 million.