Lincoln Center for the Performing Arts Inc. plans to market $100 million of variable-rate bonds today to help finance an $800 million capital expansion plan. The Trust for Cultural Resources of the City of New York will issue the bonds, which will mature in 2038.
The tax-exempt bonds will be sold in two subseries with 30 year maturities. U.S. Bank will provide a direct-pay letter of credit for a five-year term on Lincoln Center's series 2008B-1 bonds. Morgan Stanley will serve as remarketing agent on those bonds.
The Series 2008B-2 bonds will have five-year, direct-pay LOC from JPMorgan Chase and will be remarketed by Banc of America Securities LLC. Lincoln Center agreed to pay 60 basis points per annum for the letters of credit, according to the preliminary statement
Orrick, Herrington & Sutcliffe LLP is bond counsel.
Lincoln Center, a 16.3-acre campus on Manhattan's Upper West Side that is home to 12 arts organizations including the Metropolitan Opera and the Julliard School, was created as a nonprofit in 1956. It has about $262 million of debt outstanding.
The redevelopment project will create a pedestrian promenade at West 65th St. and enhance or expand existing facilities. The fundraising has covered the remaining costs of the redevelopment project and the organization has no plans to sell more debt.
Lincoln Center had planned to sell $200 million of new-money bonds around the beginning of September but delayed the deal due to market dislocation. The organization sold $100 million of new-money bonds last month. The fixed-rate bonds had maturities of eight to 10 years. The 10-year bonds were sold with two different coupons that both yielded 5.46%: $15.6 million with a 5.25% coupon and $24.8 million with a 5.75% coupon.
Moody's Investors Service rates the bonds Aaa/VMIG 1 based on the letters of credit.
Standard & Poor's rates Lincoln Center A-plus with a stable outlook.
