CHICAGO (IL)
Fitch Ratings
June 26, 2020
Fitch Ratings has downgraded approximately $40.1 million in outstanding series 2017 fixed-rate revenue bonds issued by the Louisiana Public Facilities Authority on behalf of the Archdiocese of New Orleans (LA) to ‘D’ from ‘CC’. The Long-Term Issuer Default Rating (IDR) of the Archdiocese has been affirmed at ‘D’.
Security
The 2017 bonds are secured by payments made by the Authority, and the source of these payments is solely a general unsecured obligation of the Archdiocese.
Key Rating Drivers
Trustee Notice of Non-Payment: The downgrade of the bond ratings to ‘D’ reflects the virtual certainty of a payment default on July 1, 2020 while in bankruptcy. The Archdiocese filed for Chapter 11 bankruptcy on May 1, 2020. The trustee gave notice on June 26, 2020 that the July 1 debt service payments will not be made, as the Archdiocese has not paid the trustee for debt service payments due on July 1, and the trustee does not have funds on deposit to make debt service payments. The IDR of ‘D’ reflects the Archdiocese’s Chapter 11 bankruptcy filing.
ESG – Social Impacts: The Archdiocese has an Environmental, Social and Governance (ESG) relevance score of ‘5’ for Social Impacts due to potentially significant liability from abuse claims, which appear to be a key driver of the Archdiocese’s bankruptcy filing.
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