California Science Center Foundation, CA -- Moody's affirms California Science Center Foundation's (CA) A3; outlook stable

Rating Action: Moody's affirms California Science Center Foundation's (CA) A3; outlook stableGlobal Credit Research - 15 Mar 2021New York, March 15, 2021 -- Moody's Investors Service has affirmed California Science Center Foundation's (CA) A3 rating on approximately $42 million of revenue bonds outstanding. The bonds were issued through the California Infrastructure and Economic Development Bank and mature in 2031. The outlook is stable.RATINGS RATIONALEThe affirmation of California Science Center Foundation's (center or foundation) A3 rating reflects its established and strong relationship with the State of California, including consistent lease payments that contribute to payment of debt service and governance relationship with the science center, which is an agency of the state. The rating is further supported by the foundation's position as a leading cultural institution in Los Angeles, with a national reputation, as well as significant liquidity, profitable operations and solid fundraising. These factors are tempered by the foundation's small scale and capital plans which rely heavily on philanthropy.Pandemic risks to date remain manageable for the center's long term credit quality. Although no visitors have been allowed inside the center for nearly a year, management's actions to quickly reduce expenditures and pivot to virtual programming have mitigated a meaningful amount of the fiscal damage caused by a substantial reduction in earned revenue. Favorably, the state's contract pays for much of the foundation's staff and donors continue to be supportive during the pandemic.RATING OUTLOOKThe stable outlook incorporates Moody's expectations that the foundation will preserve much of its liquidity and overall wealth as it works through operating challenges related to the pandemic. The outlook is also predicated on leadership's active pacing of major capital investments based on the timing of donor support.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATINGS-Growth of wealth that outpaces peers and provides stronger support for debt and capital plans-Sustained increase of operating revenueFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATINGS-Material spend down or loss of reserves and liquidity-Interruption in state lease payments, or change in relationship with the state or the center-Sustained decline in gift revenue or significant deterioration of operating performanceLEGAL SECURITYThe bonds are secured by a gross revenue pledge of the foundation. Gross revenues include all revenue received by or on behalf of the foundation, except income derived from securities that are irrevocably deposited in escrow to pay debt service, bond proceeds, and gifts restricted for other uses. Lease payments from the state under the Lease Purchase Agreement are included in the gross revenues. There are no financial covenants on the bonds and no debt service reserve fund.PROFILEThe California Science Center Foundation is a non-profit corporation supporting the operations of the California Science Center, an institution of the state and part of the California Natural Resources Agency. The Science Center is located in Exposition Park, in downtown Los Angeles, serving over 2 million visitors annually. The foundation has average annual operating revenue of between $30 million and $40 million.METHODOLOGYThe principal methodology used in these ratings was Nonprofit Organizations (Other Than Healthcare and Higher Education) published in May 2019 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1160889. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody's key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody's Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody's rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider's credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.The ratings have been disclosed to the rated entity or its designated agent(s) and issued with no amendment resulting from that disclosure.These ratings are solicited. Please refer to Moody's Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody's general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1243406.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the EU and is endorsed by Moody's Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody's affiliates outside the UK and is endorsed by Moody's Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody's office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody's legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Michael Osborn Lead Analyst Higher Education Moody's Investors Service, Inc. 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