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J. Paul Getty Trust, CA -- Moody's assigns Aaa to J. Paul Getty Trust's (CA) revenue bonds; outlook stable

·12 min read

Rating Action: Moody's assigns Aaa to J. Paul Getty Trust's (CA) revenue bonds; outlook stable

Global Credit Research - 12 Jan 2021

New York, January 12, 2021 -- Moody's Investors Service has assigned a Aaa rating to the J. Paul Getty Trust, CA's (The Getty) proposed $311 million of Taxable Bonds, Series 2021A. The bonds will have a mandatory date of April 1, 2024 with optional redemption three months prior to maturity. We also maintain Aaa ratings on approximately $566 million of bonds outstanding, of which $292 million will be refunded with the Series 2021A bonds. The outlook is stable.

RATINGS RATIONALE

The assignment of the Aaa reflects exceptionally strong financial reserves and liquidity supporting operations and debt, with favorable investment and financial management. Operating performance is also consistently strong, with limited direct competitive risk and manageable impacts related to the coronavirus pandemic as The Getty museum operations rely on earned income for only a small portion of its operations. Debt levels remain manageable and there are no identified new debt plans. Additionally factored into the rating is The Getty's very high reliance on investment income for operations, a largely variable rate debt structure and a significant interest rate swap liability. The Getty confronts risks associated with climate change, notably wildfires, but has active risk management and remediation actions to protect collections, facilities and neighboring properties.

The Getty holds substantial liquid reserves with prudent treasury management and established procedures in the event of a failed debt remarketing. The financial management team has a long history of managing unenhanced debt structures with frequent tender dates. The Getty will have an optional redemption window prior to the mandatory three-year tender date, during which it can redeem the bonds and liquidate assets if needed. As of September 20, 2020, The Getty had $180 million of cash and investments available within one day and $556 million available within one week.

RATING OUTLOOK

The stable rating outlook is based on The Getty's substantial financial reserves and sound financial management which provide it with significant financial flexibility.

FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING

-Not applicable

FACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING

-Significant deterioration of overall wealth levels

-Substantial debt increase

LEGAL SECURITY

All bonds, including the Series 2021A, are unsecured general obligations of The Getty.

USE OF PROCEEDS

Proceeds from the Series 2021A bonds will be used to refund the Series 2011A-1, 2012B-1, 2012B-2, 2012A-1 and 2020A-2 bonds, partially terminate two associated swaps.

PROFILE

The J. Paul Getty Trust, founded in 1953 by J. Paul Getty, is a private operating foundation and operates at two sites. The Getty Center, opened in 1997 and located in the foothills of the Santa Monica Mountains, features a museum, gardens, and facilities that house the Getty Research Institute, the Getty Conservation Institute and the Getty Grant Program. The Getty Villa, located in Malibu, houses the Getty's collection of Greek and Roman antiquities. The Getty charges no admission fee and serves around 2 million visitors annually at The Getty Center and Getty Villa.

METHODOLOGY

The principal methodology used in this rating 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 DISCLOSURES

For 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.

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.

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. One Stamford Plaza 263 Tresser Boulevard Stamford 06901 US JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Dennis Gephardt Additional Contact Higher Education JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody's Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653

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