Subscribe to our Magazine
December 23, 2010; Source: San Francisco Journal | It’s still a furious race against the clock, but the Asian Art Museum of San Francisco bought itself another 30 days to stave off bankruptcy. It now has until Jan. 21, 2011 to meet what the San Francisco Sentinel calls a “drop dead” deadline to work out a repayment plan on some $120 million of debt.
If the museum fails to reach an agreement with bondholders, its assets could be seized for auction. As the museum scrambles to work out a solution, it’s also under another cloud. Before getting a month-long reprieve from JP Morgan and MBIA, Moody’s Investor’s Services downgraded to junk the bond rating for the Asian Art Museum Foundation, the museum’s fundraising arm.
Sign up for our free newsletter
Subscribe to the NPQ newsletter to have our top stories delivered directly to your inbox.
By signing up, you agree to our privacy policy and terms of use, and to receive messages from NPQ and our partners.
In a note analyst Dian Viacava wrote, “The Ba1 rating (junk) reflects the foundation’s inadequate financial resources and liquidity to comfortably pay a likely five-year accelerated payment.” Still, the museum said in a statement that it remains optimistic it can reach a settlement before the deadline.
In its announcement, the museum said that bondholders had agreed to a “forbearance” of payments that will allow the “parties to continue to work in good faith toward a suitable restructuring of the Bonds.” In layman’s terms, that means the museum must put up or shut down.—Bruce Trachtenberg
