Motion Picture Academy sells tax-free bonds for new museum
By Dan Freed
(Reuters) - The Academy of Motion Picture Arts and Sciences said Thursday it sold a $341 million bond offering to finance a new museum in Los Angeles set to be completed in 2018.
The tax-exempt, 30-year offering was priced to yield 4.09 percent and was well oversubscribed, according to Phil Smith, head of Wells Fargo government and institutional banking.
"A who's who of all the institutional money managers for wealthy Californians showed up on this deal," he said.
The offering included a $122 million floating-rate component with a coupon that will be reset periodically through the next five years to attract investors concerned about interest rates moving higher more quickly.
Another group of investors who believe long term interest rates will stay low for a long time were attracted to the 30-year fixed rate debt, Smith said.
The project is large relative to the annual revenues and size of the academy, Smith said.
The museum, designed by Pritzker Prize-winning architect Renzo Piano, will include a 1,000-seat screening theater under a rooftop sphere with a view of the Hollywood hills. The academy is best known as the presenter of Hollywood's annual Academy Awards ceremony.
(Reporting by Dan Freed in New York; Editing by Dan Wilchins and Cynthia Osterman)
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