This is an interesting financial analysis of Ken Ham’s Ark Park. In addition to Answers in Genesis’s usual excuses about all the delays, and their inevitable whine about ObamaCare forcing them to pay for the sinful hedonism of their employees, there’s some revealing discussion about their latest effort to raise cash by selling bonds.
In an executive summary sent to its supporters, Answers in Genesis makes the bonds sound like a decent investment. The group is offering bonds with 7-, 11-, and 15-year maturities, at yields between 5 and 6 percent. A 7-year bond starts at $250,000, while an 11-year bond begins at $50,000.
Tempting as those rates may seem, there’s a small catch. As Answers in Genesis readily admits, the bonds “are not expected to have any substantial secondary market” and are “not an obligation of AiG.” Somewhat alarmingly, the bonds are unrated, an indication that they’re extremely risky—and almost impossible to resell. High risk, higher yield: These, in essence, are creationist junk bonds.
What does that mean?
“Should the project be unsuccessful,” Yang notes, “AiG holds no responsibility in meeting the interest payments of these bonds and the bonds may default.” If the project falls through, in other words, investors won’t just lose their interest payments: They’ll lose their entire investment.
Wait. So right now, if the park fails, AiG just gets to pocket all the money they’ve raised, with no obligation to their investors? They have incentive to fail! The whole story sounds like a new twist on The Producers. They’ll probably even find a way to sneak Hitler references into it.