January 29, 2012 – George Looking to Wall Street to Shore Up Archdiocese Finances

George looking to Wall Street to shore up archdiocese finances
Church officials won’t confirm bonds will be sold, but archdiocese earned a top rating from Moody’s based on a proposed offering of $151.5 million

Chicago Tribune – By Manya A. Brachear – January 29, 2012

As Cardinal Francis George prepares to retire in the next few years and hand over the reins of the Archdiocese of Chicago to a successor, he is looking to Wall Street and the achievement of one particular predecessor to ensure the church’s long-term financial viability and leave a legacy of his own.

On Wednesday, the archdiocese earned a top rating from the Moody’s firm, a typical prerequisite to selling private bonds. A bond sale is a maneuver to improve cash flow that was used by Cardinal George Mundelein nearly a century ago. The Moody’s report was based on a proposed offering of $151.5 million in bonds.

Citing strict federal regulations imposed by the Securities and Exchange Commission that preclude discussion of a pending bond sale, no church official, including George, will confirm that bonds will be issued. The Moody’s report also points out that the rating does not mean a sale is guaranteed.

But the cardinal has previously said he wants “to take advantage of historically low interest rates and the good creditworthiness of the archdiocese.”

“Rather than borrow directly from banks … it might be advantageous to float bonds and pay them back on a regular basis, which is what a lot of corporate entities do,” George said in response to questions from the Tribune last month.

But he stressed that no decision had been made. “There’s a conversation going on about whether or not the archdiocese should at this time do something that Cardinal Mundelein first did, meaning float private bonds to cover debts,” George said.

Considered one of the nation’s top businessmen of the early 20th century, Mundelein financed and created most of the modern archdiocese and earned a reputation much like the Rockefellers and the Vanderbilts. Even at the height of the Great Depression, national media touted that “no one in Chicago had better credit than the cardinal.”

According to analysts, George’s reputation may be much the same.

“He’s leaving Chicago in the best position it’s ever been in recent memory,” said Patrick O’Meara, president of O’Meara Ferguson Whelan and Conway, the financial firm hired by the archdiocese to facilitate fundraising and investment strategies. “His legacy is going to be in many ways. One way is he wants the temporal affairs to be really solid” …

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