LOS ANGELES: A performing arts school in the heart of Los Angeles is planning to borrow US$117mil in the municipal bond market, marking the largest private school deal in two years.
The Colburn School will use the proceeds to fund the ongoing construction of the school’s roughly 100,000 sq ft performing arts centre designed by architect Frank Gehry.
Founded in 1950 as a prep school for the University of Southern California with piano lessons for kids from pre-school through high school, the institution has since grown to also offer full-time high school programmes in music and dance, with a college-level music conservatory programme as well.
Graduates often go on to study at top performing arts colleges such as the Juilliard School and join professional orchestras and ballet companies around the world.
The bonds will be issued by the California Infrastructure and Economic Development Bank, and proceeds will also be used to repay US$65.5mil of existing debt.
It’s the largest municipal deal for a private school since California governor Jerry Brown’s alma mater borrowed about US$130mil in July 2024, according to data compiled by Bloomberg.
“This financing is more than funding a building, it is about positioning Colburn for the future,” Colburn’s chief financial officer Maeesha Merchant said in a statement.
“It positions Colburn to serve more students, artists and audiences while reinforcing our role as a leading destination for performing arts.”
The new centre will include a 1,000-seat concert hall, a convertible 100-seat dance studio theater, ballet and tap studios, as well as green spaces, according to bond documents.
Its total cost is estimated to be US$337mil and Colburn is also raising funds through a capital campaign to help pay for some of the costs.
Just steps from Walt Disney Concert Hall and the Museum of Contemporary Art in downtown Los Angeles, the project at Colburn broke ground in 2024 and is expected to open in September 2027.
Colburn School is set to be at least the third prep school to borrow in the muni market this month.
Private schools can use the tax-exemption if they are nonprofits, and they’ve become more frequent borrowers in recent years since the 2023 regional banking crisis took down two of the niche sector’s most prolific lenders.
So far this year, private schools have borrowed more than US$350mil in the municipal market, an increase of 92% compared to the same period last year, according to Bloomberg data. — Bloomberg
