Lincoln Center for the Performing Arts, which dismissed orfurloughed 200 employees after canceling performances because ofthe pandemic, is borrowing $73 million to endderivative trades with Morgan Stanley and Bank of New York MellonCorp.

The home of the New York Philharmonic, the Metropolitan Opera,and the New York City Ballet entered into interest-rate swaps in2006 and 2008 to lock in fixed rates on $150 million offloating-rate bonds. However, the contracts' value toLincoln Center plummeted as interest rates fell to historic lows,and it had to draw $30 million on a line of credit to postcollateral.

In mid-August, Lincoln Center plans to issue about $140 millionof fixed-rate tax-exempt debt at a premium to refinance the bondsand about $73 million taxable bonds to pay off the swaps, accordingto Leah Johnson, the center's chief communications and marketingofficer. Lincoln Center is taking advantage of low interest ratesto cut exposure to variable-rate debt, free up its $100 millioncredit line, and potentially reduce interest costs compared withalternatives, she said.