Philadelphia’s Please Touch Museum Defaults on Principal PaymentRomy Varghese
Philadelphia’s Please Touch Museum defaulted on its municipal debt for the third time yesterday as it failed to make principal payments, according to a filing.
The museum didn’t make a $670,000 principal payment to holders of its 4.125 percent bonds that matured yesterday, although investors received interest payments totaling $1.49 million from a reserve fund, according to a notice by the trustee, U.S. Bank National Association, posted today on the Municipal Securities Rulemaking Board’s website.
The institution, which says it was the first designed to serve children 7 and younger, started skipping debt obligations last year. Including yesterday’s action, the trustee has made three withdrawals from the debt-service reserves for interest payments, according to the filing.
The 38-year-old institution sold $60 million of tax-free debt in 2006 for an expanded facility with the expectation that fundraising would cover the payments. Museum officials decided to default last September as a way to start restructuring discussions with bondholders, Gretchen Santamour, a partner at Stradley Ronon Stevens & Young LLP in Philadelphia, said in July.
Joe Costello, a spokesman for the museum, didn’t have an immediate comment on the bond filing when reached by telephone after business hours. Santamour didn’t immediately respond to an e-mail requesting comment.