Lincoln Center for the Performing Arts, which dismissed or furloughed 200 employees after canceling performances because of the pandemic, is borrowing $73 million to end derivative trades with Morgan Stanley and Bank of New York Mellon Corp.

The home of the New York Philharmonic, the Metropolitan Opera, and the New York City Ballet entered into interest-rate swaps in 2006 and 2008 to lock in fixed rates on $150 million of floating-rate bonds. However, the contracts' value to Lincoln Center plummeted as interest rates fell to historic lows, and it had to draw $30 million on a line of credit to post collateral.

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