The Metropolitan Opera Company’s week has gone from bad to worse as Moody’s Investors Service downgrades their credit rating.
According to a statement by Moody’s, Met’s Taxable Bonds have been downgraded from Baa1 to Baa2.
The rating is a result of concerns about The Met Opera’s current cash flow shortfalls, and a failure to meet endowment fundraising targets. This will impact $94M of rated debt.
The rating adjustment follows the Met’s announcement last Thursday that it has cancelled the remainder of the 2019-20 season, and temporarily laid off musicians and staff. The financial loss is estimated to be $60M.
“The Baa2 rating incorporates the Metropolitan Opera’s global brand and considerable scope for a cultural not-for-profit with $302 million in operating revenue in fiscal 2017. The rating also acknowledges strong donor support for operations, $290 million of total cash and investments and move to reduced endowment spending rate and reduced expenses. These strengths are tempered by weak unrestricted liquidity including ongoing reliance on an operating line of credit, material pension exposure and softening ticket revenue.”
On March 25, the Met launched an appeal to donors calling for emergency financial support. While the campaign has so far netted the organisation approximately $20M in donations, it has also caused some backlash in the community.
The Middle Class Artist reported that emails were also sent to six singers who had been laid off by the Met the prior week.
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