(Bloomberg) -- The New York Public Library's bonds were upgraded, thanks in part to its friends in high places.
Moody's Investors Service raised its rating on $185 million of taxable debt one notch to Aa3, its fourth-highest investment grade. The company cited steady philanthropic support that left it with $1.5 billion of net assets by the end of June, reducing its need to sell more debt to finance projects and allowing it to use its endowment to support operations.
The value of the the system's ivestments in hedge funds, private-equity, real estate and other assets rose by about $100 million to $1.3 billion as of June 30, 2018, according to its financial statement. Private contributions and grants made up $47 million of the $322 million operating budget, compared with $70 million the prior year.
The public library system, founded in 1895, is the largest in the U.S., with 88 branch libraries in the boroughs of Manhattan, the Bronx, and Staten Island and four major research libraries. The system receives about 54 percent of its $322 million operating revenue from New York City and another 7 percent from the state.
In 2017, it announced a $317 million master plan for the iconic Beaux-Arts Stephen A. Schwarzman Building on Fifth Avenue and 42nd Street that would increase public space for research, exhibitions and educational programs by 20 percent. In 2008, Schwarzman, co-founder of the Blackstone Group LP, donated $100 million to the library.
The NYPL has successfully met its "sizable" fundraising goals, Moody's said. The rating company expects that the system's major projects now underway will be funded with government aid and private gifts, limiting the need for more borrowing.
To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net
To contact the editors responsible for this story: James Crombie at jcrombie8@bloomberg.net, William Selway, Michael B. Marois
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