The California Infrastructure and Economic Development Bank issued $322.3 million in bonds for a Los Angeles art institution to refund previously issued securities.
The bank sold the bonds in two series. The Series 2023A bonds, consisting of $175.9 million, mature between 2024 and 2033, paying interest at a fixed rate of 5%. The Series 2023B bonds, consisting of $146.4 million, mature on October 1, 2047, and yield 3.35%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The bank will loan the bond proceeds to the J. Paul Getty Trust, a nonprofit art institution.
The rating “reflects exceptionally strong financial reserves and liquidity supporting operations and debt, with favorable investment and financial management,” Moody’s analysts wrote.
The issuance follows a period of wealth growth by the trust, which is the world’s wealthiest art institution by endowment. The trust has recorded annualized returns of 9.1% over the past decade, and has more than $8 billion in cash and investments.
“Operating performance will remain consistently strong, with limited direct competitive risk, minimal reliance on earned revenue and substantial budgetary flexibility,” according to Moody’s.
The bond proceeds will refund securities issued in 2021.
The Getty Trust is also a cultural and philanthropic institution based in Los Angeles, where it runs the Getty Center museum. The bonds are limited obligations of the bank, payable by revenue from the trust.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for more than $350 million. The price reflected a premium of $28 million.