Ken Ham’s Ark Bonds — 24 Feb 2014 Update

Noah's Ark (by Edward Hicks, 1846)

Noah’s Ark (by Edward Hicks, 1846)

Our most recent post about the unrated municipal bonds being issued to finance the proposed Ark Encounter project, which will be operated by a company controlled by Answers in Genesis (AIG), was the 11 Feb 2014 Update.

As you recall, the last reliable information we had (from Bloomberg) informed us that 06 February was the deadline for the bond offering, and if about $29 million worth of bonds weren’t sold by then, all the money from bonds that actually were sold must be refunded. Or, as apparently happened when an earlier deadline came and went, it’s conceivable that the sale period might be extended yet again

We’ve continued to search for news, but we haven’t found anything. As we told you before, we not only search on ol’ Hambo’s name, and the full name of AIG, and “Ark Encounter,” and even “Noah’s Ark,” but we also search on “Crosswater Canyon” (the AIG-owned company that is actually borrowing the money), and “City of Williamstown” (the Kentucky municipality that is fronting for the bond issue, but which has no financial responsibility for paying interest or principal), and also “Ross Sinclaire & Associates” — the underwriters of the bond issue. We get no hits from a news search on any of those.

Today, however, we have the hint of some news. It’s from Ken Ham, ol’ Hambo himself. He has just posted this at the AIG website: In Nashville, But Not To Sing.

There’s nothing in ol’ Hambo’s post that’s relevant to our topic until the very last sentence, which is this:

I have a few media interviews lined up over the next couple of days to discuss the debate and also to share something about the Ark Encounter.

That’s very mysterious. What does it mean? Has ol’ Hambo’s bond issue been successful? It seems that we’ll soon find out. Stay tuned to this blog!

Copyright © 2014. The Sensuous Curmudgeon. All rights reserved.

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37 responses to “Ken Ham’s Ark Bonds — 24 Feb 2014 Update

  1. Stephen Kennedy

    If Hambo’s junk bond sale had been successful he would have said something like “I have some really exciting news to announce about the ark encounter” and would probably have talked about when construction was going to start. Hambo gives his followers good news in his daily blog and on the AIG website, he does not share it with the press for them to disseminate.

    I would bet the something he is going to share about the ark encounter with the media is that due to an inability to secure sufficient funding the start of construction has been postponed indefinitely. Hambo probably realizes that by March 1st news of the bond issue failure will be made public by other parties, such as the underwriters or the town of Williamstown, and he wants to be the first to put a spin on it.

    I think the purpose of todays cryptic sentence was to signal the AIG faithful that bad news is coming about the ark encounter but do not plan on seeing it on the AIG website.

  2. Is it too much to hope that he will announce he has secretly finished building his Ark–and is about to sail away for good?

    …Well, it was a sweet thought for the micro-second it lasted…

  3. Lemme guess, they’re going to extend the deadline and offer more low cost bonds so the rubes personal investors get another opportunity.

  4. I thought I knew how to tag a strikeout (rubes), but I was mistaken.

  5. One more interesting fact about Ken’s blog post: in it, he also pitches his book Six Days, but if you click the link he provides, you get directed to a page that says:

    “Oh no! You’re looking for something which just isn’t here!”

    Now that’s a sign from above if I’ve ever seen one.

  6. Paul S says: “I thought I knew how to tag a strikeout (rubes), but I was mistaken.”

    No problem. The clouds parted and a Curmudgeonly Hand descended from above. It’s fixed!

  7. Ham ought to retell the story of how King David wanted to build a temple for Yahweh, but a prophet told him that this task was not for him. The temple-building was divinely reserved for his son Solomon at a later date. Hence: now is not the right time to build the Ark, but in God’s good time … yadda, yadda, yadda, etc. etc. etc.

  8. Paul S says: “Lemme guess, they’re going to extend the deadline …”

    I don’t know if he can unilaterally do that. My guess is that if the deadline is reached and the necessary minimum hasn’t been sold, then the earlier purchasers should be entitled to a refund at the deadline date — unless they all agree to an extension. But it seems that the original deadline was extended to 06 Feb. Maybe it’s built into the deal that extensions are allowable, or maybe the brokers are all scrambling to get their customers to consent. Who knows?

  9. I shared the following with the Curmudgeon earlier today as well as Hemant Mehta over at the Friendly Atheist:

    I just spoke with Zach Logan, a bond associate at Ross Sinclaire and Associates–the firm that has been organizing the Ark Encounter municipal bond sales.

    He can be reached at 1-800-543-1831 or his cell 513-381-3939.

    He stated that they were just wrapping up the bond issuing today, and that–while he didn’t have all the final numbers–it appeared to have been successful.

    Ken Ham also stated in his blog today that he would have an announcement regarding the Ark Encounter in a few days.

    Doesn’t look good, but still hoping that it wasn’t successful.

  10. I don’t know much about bonds, but since these are worthless bonds in any meaningful sense with zero value and are not tradable on the open market, maybe they do not have to follow common market rules. I worked for a co-op that had B class stocks and they were worthless outside of the parent company. Maybe they’re like that, you can buy them, but their value is determined by the holding company and they have no outside value.

  11. @Daniel Webb, That would certainly be unexpected. Is it possible the Ham or AIG purchased the remaining bonds?

  12. Daniel Webb says: “I shared the following with the Curmudgeon earlier today”

    Yes. Were it not for you, I wouldn’t have found that one sentence in Hambo’s post.

  13. Richard Olson

    Daniel Webb, you have confused me. Did Zach Logan tell you some sort of ark project bond issuance is wrapping up successfully today? If so, this implies (to me) that the project continues, even if complete funding as per the 06 deadline did not occur.

  14. Stephen Kennedy

    In addition to the bond redemption deadline, Hambo was also obligated to start construction in March of this year in order to take advantage of an estimated $47 million dollars in tax breaks from the Commonwealth of Kentucky in addition to several million more in infrastructure upgrades to benefit the ark park. When it was first announced to ark park was going to be a for-profit subsidiary of AIG. Now that its structure has been changed to a 501(c) entity it is probably no longer allowed to take advantage of government subsidy programs. I think the big winners here may be the taxpayers of Kentucky.

    I think Hambo was conflicted about the tax subsidies. He wanted the money but did not like the very big string attached that he would not be able to practice religious discrimination in hiring staff for the ark park like he is allowed to do for the museum.

  15. @Paul S That could be possible–maybe even to the extent that they leveraged their other assets to make bond purchases for the ark encounter possible. Hard to tell though

    @Richard Olson He didn’t state definitively that the funding was successful–just that he believed (without having the complete report in front of him) that the funding had been successful.

  16. Stephen Kennedy

    AIG does, or did, own the museum free and clear and it has a book value of about $27 million. It is possible that they could have mortgaged the museum and used the proceeds to purchase the bonds.

  17. Stephen Kennedy

    On second thought, it is unlikely they would mortgage the museum or any other assets since that would transfer the debt from Cross Water Canyon to AIG itself.

    It is very strange that the Ross, Sinclair website did not list any ark bonds in their inventory for sale or list this offering under the bond financings they have in progress or have completed on their website.

  18. If it were good news, Ham would say something like, “God has enabled us to…” No mention of God doing it = prayer answered in the negative.

  19. Stephen Kennedy stated: “When it was first announced to ark park was going to be a for-profit subsidiary of AIG. Now that its structure has been changed to a 501(c) entity it is probably no longer allowed to take advantage of government subsidy programs. I think the big winners here may be the taxpayers of Kentucky.”

    Somehow I would think the Kentucky legislature would come up with another creative solution to this problem and give Ham as much of a tax break as possible. They wouldn’t/couldn’t let the Ark sink, could they?

  20. Stephen Kennedy

    SC, it is credible that the brokers would be able to get investors who have already purchased these bonds to consent to as many new deadlines as it would take to sell the minimum amount of bonds to avoid redemption. These bonds are a terrible investment and the only reason anyone would buy them is to build the ark park for religious reasons. Therefore, they are likely to agree to things ordinary investors would not agree to such as endless deadline extensions if that is what it takes to build the thing.

    The purchasers of these bonds are like the stockholders in Zion Oil which you wrote about a couple of months ago. There were people who had lost their entire life savings in all those dry holes yet seemed to bear no animosity against the creationist running Zion Oil. It will be the same with the ark bonds. People will lose their investments but will not care because they sincerely believe they are building up treasure in heaven.

  21. Stephen notes: “People will lose their investments but will not care because they sincerely believe they are building up treasure in heaven.”

    Exactly. That’s one of the things that slimy hucksters like Hambo and his ilk trade on. I wish I could feel sorry for the rubes that are taken in by these grifters, but I don’t. Their ignorance cheapens our society, so let them hug their bibles as they shuffle off to the poor house, Praise Jesus!

  22. “Extraordinary Mandatory Redemption for Project Fund Insufficiency

    Unless the balance in the Project Fund on March 1, 2014 shall be at least $45,520,000, the then Outstanding Series 2013 Bonds shall be called for redemption on the earliest possible redemption date thereafter at par and without accrued interest.”

    According to the Ark Encounter website, the project has raised < $14.5M in donations (target $24.5M). If the bonds have raised the full $27M, that still leaves him short by $4 milllion. I don't know what other sources of funds he has for this project.

  23. Why doesn’t God pay for it?

  24. Stephen Kennedy

    It is odd that the underwriters, Ross, Sinclaire, still do not have anything related to this bond issue on their website bond calander because from looking at their other placements this would be a pretty big deal for them. I also find it strange that they would discuss the issue with an unrelated party before it had been formally finalized.

  25. Stephen Kennedy: Zach Logan is the bond associate at Ross Sinclaire and Associates with whom I spoke a few weeks ago, and he was all too eager to get me into the Ark bonds if I were able to wire the funds, even though it was after the purported Feb 6 deadline.

  26. Hard to imagine $45 million with only 74 trades.

    http://www.bondview.com/pricecheck/bond/970350AZ7

    BOND NAME:
    WILLIAMSTOWN KY INDL BLDG REV TAXABLE-CROSSWATER CANYON PJ
    CUSIP:
    970350AZ7
    Maturity Date:
    10/01/2028
    Coupon
    6.00 %
    # Current Trades
    9
    # Total Trades
    74

  27. Most recent trade was Jan 13, 2014
    Price Current Yield Amount Trade Type Date Traded
    100.00 6.000 $5,000.00 Investor Sold 01/13/2014 12:45pm
    100.00 6.000 $5,000.00 Inter-Dealer 01/13/2014 12:44pm
    100.10 5.994 $5,000.00 Investor Bought 01/13/2014 12:43pm
    100.00 6.000 $5,000.00 Investor Bought 01/03/2014 02:01pm
    100.00 6.000 $5,000.00 Investor Bought 12/26/2013 10:03am
    100.00 6.000 $5,000.00 Investor Sold 12/26/2013 10:03am

  28. @edhensley
    What you’re missing is that those trades you listed above are only for the 15 year bonds with 6% yield. There were a total of $6,410,000 of these 15 year/6% bonds sold. (Minimum level of investment for that level was $5,000)

    If you go to this site: http://www.bondview.com/pricecheck/issuer/970350AZ7
    You’ll see all four bond types listed with their dates of maturity and expected yield–as well as sales. It corresponds with the executive summary for the ark encounter seen here: http://www.arkbonds.com/files/Executive_Summary_Bond_Version_1_2014_Email.pdf (Page 3 has the breakdown)

    For the 7 year bond with 5.25% yield (minimum $250,000 investment): $8,000,000 worth sold

    For the 9 year bond with 5.5% yield (minimum $100,000 investment):
    $2,450,000 worth sold

    For the 11 year bond with 5.75% yield (minimum $50,000 investment):
    $3,550,000 worth sold

    For the 15 year bond with 6% yield (minimum 5,000 investment):
    $6,410,000 worth sold

    So that brings our total to:
    8,000,000+2,450,000+3,550,000+6,410,000= 20,410,000

    The problem is: The sale numbers only seem to reflect sales since 12/18/2013. That’s the earliest sale recorded–I’m guessing that these numbers don’t reflect the first sale–wasn’t that sale in October/November?

  29. Stephen Kennedy

    According to BusinessWeek magazine the initial offering in November-December resulted in bond sales of $10,500,000 by December 19,2013. If you add that to the $20,410,000 sold since December 18, 2013 it totals $30,910,000 in bonds sold altogether. Since the offering documents said that at least $45,000,000 had to be sold by March 1, 2014 or there would be a mandatory redemption of all bonds sold as of that date it looks like they are not going to make it.

    AIG’s announcement on their website that there would be a live update tomorrow sounded a lot more like if the project will happen rather than when construction will start.

  30. @Stephen
    Agreed, usually Ham/AiG use happy wording in their blog posts for victories.

    I wouldn’t be surprised if they announce that the bonds didn’t work out but that they’re going to find another way to move ahead by scaling back the project in some money-saving fashion. They’ll also blame secular media, I’m sure.

  31. Stephen Kennedy

    @Daniel

    I think you are probably correct that they will say due to various circumstances, they are announcing a scaled down project with uncertain timing rather than just saying the original project is being abandoned.

  32. Noah’s Schooner, maybe? Or, Noah’s Yacht?

  33. New countdown thread is up. Probably best to put your comments there.

  34. “And God did asketh Noah that he stoppeth playing with his dinghy.”

    Genesis 3:14 (KJV)

  35. Thank you for your clarification regarding the bonds. This is not my area of expertise.