MoMA deal ties cultural cachet to municipal bonds

The Museum of Modern Art offers New York and its visitors the chance to see paintings by Picasso, Van Gogh and Warhol. On Wednesday, it also offered $210 million of municipal bonds.

The deal was a rare opportunity to buy bonds from what analysts call a preeminent modern art museum with a global reputation. That reputation may have bolstered the performance of the deal.

$50 million of the bonds will mature in 2031 and priced at 2.76%. The remaining $160.7 million, due in 2036, priced at 3.11%,.

The deal was managed by Goldman Sachs (GS) with Orrick as counsel. It was priced through the Trust for the Cultural Resources of New York.

MoMA's strong reputation likely gave a boost to the deal, according to Pat Luby, senior municipal strategist of CreditSights.

"There are so many individual investors who are emotionally invested in their portfolio, whether it's from bonds from their alma mater, or toll roads that they drive on," Luby said. "MoMA is an institution that is very visible and is very dear to a lot of high net worth individuals."

The deal was also somewhat unique, Luby said, in a way that he expects helped its performance.

"It sounds like a pun, but it's a museum piece," Luby said. "It's an obligor that doesn't come to market very often, and is very widely recognized."

Bloomberg shows the spread for the 2036 bonds at +18, which Luby called a "reasonable price." However, he expected the deal would have been better subscribed under different circumstances.

U.S. Treasuries were rallying on Wednesday due to falling oil prices, and the muni market grew slightly stronger in sympathy. On Tuesday, New York City elected a slate of democratic socialist candidates to Congress and the state legislature.

Luby said the political environment ? New York City's budget has also been delayed for more than a month ? may have impacted the deal.

"I think that the political turmoil of what's going on in the city probably dampens demand from retail investors to want to be putting money to work in New York City," Luby said.

The proceeds of the bonds will finance a portion of "various capital improvement projects at the museum's existing facilities," according to an investor presentation. They will also refund outstanding revenue bonds from 2016 and refinance amounts drawn on a line of credit MoMA took out to pay certain maturities of the refunded bonds.

The deal was rated Aa2 with a stable outlook by Moody's Ratings and AA with a positive outlook by S&P Global Ratings. The agencies stressed the museum's strong finances and cultural status in their ratings.

MoMA is "one of the premier modern art museums, I would say, in the world," S&P analyst Stephanie Wang said.

Founded in 1929, MoMA has collected roughly 200,000 works of art, according to the deal's online investor presentation. The museum also operates a free museum called MoMA PS1, a publishing program, a learning and engagement program and a conservation laboratory.

The museum has used its "exceptional global brand" to build a strong financial profile, according to Moody's analyst Debra Roane.

MoMA had more than 2.85 million visitors in fiscal 2025 and around 116,000 members, according to S&P. Its "steady operating surpluses on a cash basis and healthy financial resource ratios," according to S&P's rating report, and high liquidity compared with other cultural institutions.

The museum's resources have been fairly flat over the past couple of years, Wang said, but S&P assigned a positive outlook because analysts felt there is potential for growth.

According to the roadshow presentation, MoMA's leadership anticipated a slight dip in attendance and revenues and attendance in fiscal 2026, but the museum's performance exceeded expectations. In fiscal 2027, the museum budgeted for an increase in revenues and expenses.

MoMA has high leverage, Roane said. Its debt is structured in three bullet payments, which Roane said may be a challenge to manage.

"The first bullet of $50 million due in fiscal 2031 cannot be refinanced on a tax-exempt basis and MoMA intends to repay it in full," S&P wrote in its report. "Management will evaluate various refinancing options closer to the date of maturity for the other two bullets."

The third bullet maturity, due in 2052, consists of $100 million of taxable bonds issued in 2021. The museum also has a $75 million line of credit.

The museum's maximum annual debt service in 2036 equates to 33.2% of its fiscal 2025 operating expenses, S&P added.

But the museum's cash-to-debt ratio is very strong compared to its peers, Wang said.

MoMA's investment portfolio was worth $1.92 billion in April, according to the investor presentation. It has steadily grown from $1.497 billion in 2022.

By S&P's calculations, that's 5.018 times greater than the museum's expenses and 5.84 times greater than pro-forma debt.

MoMA is seeking to expand its digital offerings, Wang said, hiring a "digital officer" and creating a strategic plan.

MoMA.org recorded roughly 26.7 million sessions in FY 2025, according to the investor presentation, and the museum has 15.9 million followers across Instagram, Facebook, X (formerly Twitter), Threads and TikTok.

MoMA's digital efforts are in line with many museums' hopes, Wang said, but MoMA is "maybe a little bit ahead" at implementing them due to its greater capacity.

Like other cultural institutions, MoMA will have to endure lower international tourism to the U.S., Roane said, and expanding its digital and retail presence will hopefully offset whatever losses result from a tourism slump.

But both Roane and Wang expect MoMA's strong brand to help it maintain strong attendance.

"Across the board there's just headwinds with international tourism being down," Wang said. "But I would say, generally, people who come [to New York], if they want the cultural experience, MoMA is probably one of those institutions on their list."