New York City’s Metropolitan Opera Association, the largest U.S. performing arts organization, plans to sell $100 million of taxable debt to end a swap agreement and repay loans from Bank of America Merrill Lynch.
The group, founded in 1883, is selling debt for the first time, said Eric Wild, a managing director in the public finance group at New York-based Morgan Stanley, which is managing the sale.
Lee Abrahamian, a Met spokeswoman, referred questions about the sale to Morgan Stanley.
Proceeds will pay down two Bank of America loans totaling about $63.2 million and end an interest-rate swap agreement with the bank, according to bond documents. Terminating the swap cost $2.6 million as of July 31, according to the offering statement.
The funds will also pay operating expenses, according to bond documents. The bonds, set to be sold as soon as Dec. 13, will be sold as taxable securities in the corporate market because of that use, Wild said.
Moody’s Investors Service rates the sale A3, its seventh- highest grade. Standard & Poor’s rates the debt one level higher at A.
The Met is one of the largest opera houses in the world, with more than 200 performances a season. With a 2013 operating budget of $329 million, it has 1,600 full-time and seasonal employees, plus 1,800 part-time workers, according to the bond documents.
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