The Film Academy Tidies Up Its Finances With Some Replacement Bonds

The Academy of Motion Picture Arts and Sciences is once again tidying up its finances with a bond offering.

This time around, the Academy has posted notice on the Electronic Municipal Market Access website of 18 separate issues with total face value of about $127 million, one issue maturing each year from 2024 to 2041. The issues are called “revenue refunding bonds,” a device typically used to replace existing debt rather than create added indebtedness.

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Disclosure documents for the offering weren’t posted as of Friday morning, and precisely which existing bonds might be replaced wasn’t clear. An Academy spokesperson had no immediate comment. But a person familiar with the offering said it was successfully made on Thursday with an overall yield of 3.77%, saving the Academy about $1 million a year when compared to the bonds being replaced.

In 2020, the Academy used a similar offering to replace older bonds that were maturing, and would soon have required a large principle payment. Because interest rates were low at the time, the 2020 bonds sold at a high premium to their face value, resulting in a yield of 1.38% — in effect providing cheap money for the replacement of old bonds.

The new bonds, according to EMMA, were sold at various prices, resulting in yields between 2.96% and 4.14%. The Academy’s cost of money for the bonds was thus higher than that of the 2020 offering.

According to its most recent financial report, the Academy as of June 30, 2022, had about $465 million in outstanding debt, most of it tied to construction and support of the Academy Museum of Motion Pictures.

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