NEW YORK – The Archdiocese has taken out a bank loan of $7.5 million from the Alma Bank of New York to return the funds taken from the restricted accounts of St. Nicholas National Shrine and the clergy pension fund, and also to pay other debts.
The National Herald had revealed since September that the Archdiocese had reached virtual bankruptcy and it was thinking of getting a bank loan, using as collateral its two office buildings in Manhattan
The Archdiocese has now confirmed this, via the following press release:
ARCHDIOCESE COMPLETES FINANCIAL TRANSACTION WITH ALMA BANK
The Greek Orthodox Archdiocese of America announces today that it has completed a financial transaction with Alma Bank which has provided to the Archdiocese credit facilities at closing to immediately restore funds due to donor restricted and custodial accounts and to additionally satisfy legacy obligations from prior years.
“We are grateful to Alma Bank for its confidence in the concrete actions already taken by the Archdiocese towards financial stability and a balanced budget for this and future years” noted Bishop Andonios, Chancellor of the Archdiocese. “The decision of Alma, along with the approval of the Attorney General’s Office which was required for such a transaction, validate the actions taken to date by the administration of the Archdiocese to implement appropriate and necessary managerial and financial controls. That our finances and accounting practices have successfully undergone thorough due diligence, and have subsequently been found strong, represents an objective vote of confidence in the Archdiocese and is a success shared by us all.”
Alma has provided a 10 year $5.5 million mortgage at an initial 5-year rate of 4.25% along with a credit line on terms that are considered customary for commercial loans to a not-for-profit organization. The Archdiocese used loan proceeds from the mortgage and credit line aggregating $7.5 million to restore monies to the St. Nicholas Greek Orthodox Church and National Shrine, fulfill obligations to restricted funds and the pension plan, and to fund the Metropolises of the Archdiocese.
The debt service associated with the bank loan are well within budgeted amounts for addressing past obligations of the Archdiocese which is pleased to have established the banking relationship with Alma Bank.