Met’s $250m bond offering to fund expansion

Moody’s gives museum’s debt a AAA rating due to “favorable cash flow”

By Julia Halperin. Web only
Published online: 21 January 2015

The Met's $250m bond offering will finance capital infrastructure improvements over the next decade

The Metropolitan Museum of Art is preparing to launch “the most high-profile cultural building project in New York over the next ten years”, Thomas Campbell, the museum’s director, recently told Vanity Fair. Now, the institution is putting its money where its mouth is. The Met is planning a $250m bond offering on 26 January to finance capital infrastructure improvements over the next decade, according to Moody’s Investors Service.

The Met’s $250m increase in debt coincides with an ambitious plan to overhaul its Modern and contemporary galleries. Although the museum has not tapped an architect or revealed a budget for the project, Campbell hopes to finish the gut renovation in time for the Met’s 150th anniversary in 2020. (Completed in 1987, the Lila Acheson Wallace Wing, where the Met’s Modern and contemporary art is displayed, “never really got built properly”, its architect Kevin Roche told The New York Times.) The Met has also taken out a lease on the Whitney Museum’s former home for at least eight years, adding to its overhead. Its first exhibition at the Marcel Breuer-designed building, “Unfinished”, is due to open in March 2016. 

Moody’s assigned the Met’s debt a AAA rating, the highest possible score, due to the museum’s “exemplary brand recognition as one of the world’s largest art museums, with excellent prospects for continued strong donor support and diverse revenue streams supporting favorable cash flow”. The Met does not intend to borrow additional money beyond the $250m, Moody’s reported. When the museum last sold debt in 2006, it offered $130m in bonds. A spokeswoman for the museum did not immediately respond to a request for comment.