Trading Short-Term Debt For Long-Term

“With debts mounting and its future on the line, the Baltimore Symphony Orchestra has drafted an unusual proposal to take out the equivalent of a 30-year mortgage on its house in order to fund new programs that it hopes will boost revenue and finance a deficit that is expected to grow to $12 million by 2008. The BSO’s board has agreed in principle to sell Meyerhoff Symphony Hall to a newly created nonprofit subsidiary, which will finance the purchase by issuing as much as $30 million in tax-exempt bonds, under one scenario presented to directors. The orchestra would then lease the concert venue back from the subsidiary for an amount to be determined.”