by Tom Gallagher
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Moody's Investors Service affirms the Chicago archdiocese's A1 rating on its privately placed Series 2012 and Series 2013 Unsecured Notes.
- Launching a $350 million capital campaign that has exceeded its major gifts goal and has raised nearly $180 million thus far;
- Reducing the financial support needed by parishes and schools by helping them improve their operations, seeking new funding, and, where necessary, bringing low enrollment schools together in consolidations; and,
- Improving the effectiveness and efficiency of our central administrative operations, the Pastoral Center.
The A1 rating reflects the [archdiocese's] standing as one of the nation's largest archdioceses, with robust cash and investments relative to debt and operations, strong governance and management practices and history of strong philanthropic support.
Offsetting challenges include weak Pastoral Center operations including continued funding of parishes and schools, exposure to uncertain financial impact of existing and potential future sexual misconduct claims and volatile operations due in part to changing revenues from parish collections and from cemetery sales of pre-burial services.
OUTLOOK
The negative outlook reflects weak operations, although improved, that will take further time to restore to fiscal balance. The rating outlook also reflects the financial risk from a rise in misconduct claims and settlements in FY 2014, with other claims still to be appraised and to reach final outcome, which would reduce reserves. The rating could be pressured if the future number of claims or settlement amounts are similar or greater than seen in FY 2014 and negatively impact established reserves.
