Thursday, November 27, 2014
Inquirer Daily News

Investors demand millions from deadbeat Please Touch Museum

Standard & Poor's Rating Services has cut its credit rating on Philadelphia's Please Touch Museum by two notches to D -- its lowest rating, reserved for borrowers who have defaulted on their committments -- from last year's CC, or 'highly vulnerable', after bondholders on June 10 demanded the museum refund "all principal and interest" on $58 million in bonds used to build its underused Fairmount Park facility. The museum had hoped to get the bondholders to accept lower payments.

Investors demand millions from deadbeat Please Touch Museum

Children play at the Please Touch Museum in Fairmont Park in Philadelphia on Friday afternoon, January 28, 2011.  (Laurence Kesterson / Staff Photographer)
Children play at the Please Touch Museum in Fairmont Park in Philadelphia on Friday afternoon, January 28, 2011. (Laurence Kesterson / Staff Photographer)

Standard & Poor's Rating Services has cut its credit rating on Philadelphia's Please Touch Museum by two notches to D -- its lowest rating, reserved for borrowers who have defaulted on their committments -- from last year's CC, or 'highly vulnerable', after bondholders on June 10 demanded the museum refund  "all principal and interest" on $58 million in bonds used to build its underused Fairmount Park facility. The museum had hoped to get the bondholders to accept lower payments.

After missing a bond payment last fall in a failed attempt to convince bondholders to accept less, the museum has $1.8 million in its debt service reserve, $3.6 million in a collateral fund and $11 million in cash and marketable investments -- more than enough to cover the $2.16 million principal and interest payment due Aug. 1, but not nearly enough to cover the $58 million in principal that it owes bondholders, analyst Nick N. Waugh wrote in a report to S&P clients. Including interest, the museum owes over $100 million.

A museum spokeswoman did not immediately respond to a call and email seeking comment.

Joseph N. DiStefano
About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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