The Trust for Cultural Resources for the City of New York expects to come to market next week with a $77 million green bond issuance to fully refund 2011 bonds that backstopped construction of the Whitney Museum of American Art’s new building.
Morgan Stanley is lead manager.
The Whitney, which socialite Gertrude Vanderbilt Whitney founded 90 years ago, relocated five years ago to Gansevoort Street in Lower Manhattan’s Meatpacking District near the Hudson River. Its previous location was at Madison Avenue on the Upper East Side.
Today, the permanent collection holds about 25,000 paintings, sculptures, prints, drawings, photographs and other artifacts.
In 2016, the Whitney became the first city museum to receive LEED gold status based on a series of sustainable features in its new building.
Fitch Ratings and S&P Global Ratings assign AA and A-plus ratings, respectively, to the Series 2021 revenue refunding bonds, which are structured as fixed rate, tax-exempt with a 10-year bullet. The expected maturity date is July 1, 2031. Their respectve outlooks from Fitch and S&P are stable and negative.
S&P assigned its negative outlook to the Whitney along with many other nonprofits on April 20.
"The negative outlook continues to reflect [S&P's] opinion of continued uncertainty and risk due to COVID-19," the rating agency said, citing revenue pressure, reduced capacity and travel limits.
Like many cultural institutions, the Whitney has felt the hit from COVID-19. The pandemic has triggered layoffs of 416 employees and staff cuts for senior management.
While museum expects a budgeted cash operating deficit of $4.5 million for fiscal 2020 due to the pandemic, it expects no major effect on its capital program, co-chief operating officer and chief financial officer Idehen Aruede said on an investor roadshow call.
The Whitney hired Boston Consulting Group in the spring to crunch scenarios related to the pandemic impact.
Museum officials budgeted for $49.2 million in total operating revenues for FY21, down from $58.6 million the previous year.
According to Aruede, the market value of the museum’s cash and investments totaled $505.8 million as of June 30 while the approximate fair value of endowed net assets totaled $371.8 million.
“This represents significant growth in the balance sheet of the museum over the last 10 years, and certainly the financial growth from the time of the museum’s inaugural debt issuance back in 2011” Aruede said on an investor roadshow call.
The museum closed on March 13 as the pandemic escalated, then reopened to 25% capacity on Sept. 3. Gov. Andrew Cuomo and Mayor Bill de Blasio have warned about rolling back reopenings, given the resurgence of late in coronavirus cases.
Aruede said the museum, traditionally less dependent on international travel than its peers, has drawn roughly 85% of its visitors from the tri-state region since reopening.
“We like to think of the Whitney in many ways as a museum in New York for New Yorkers, and in that regard, we’re very much a neighborhood museum,” Aruede said.
Philanthropic support for the Whitney has stayed resilient despite the pandemic, according to Aruede. In fiscal 2020, he said, the museum generated $11.2 million in funding from contributions, grants and bequests versus pre-pandemic estimates of $13.1 million. This includes $3.8 million in donor-designated funding from private gifts.
The Whitney still owns its former site, the Breuer Building, which now houses the Frick Collection temporarily under an agreement with the Metropolitan Museum of Art. The Whitney receives $3.5 million annually through that arrangement, Aruede said.
