Default Danger For Nashville Symphony

The orchestra recently announced it will not renew a letter of credit from 2004, which led trustees for bondholders to issue a notice that $88.3 million in outstanding bonds will be put up for sale April 1, the Tennessean reported.

The news leaves less than two weeks for the orchestra to work with banks to nail down a new agreement. What a default could mean for the future of the facility is unclear.

Symphony President Alan Valentine refused to speculate whether the organization could be sold off and how a default could affect the symphony’s credit, the Tennessean said.

But he did add that the symphony continues “to make adjustments, changes and cuts to our operating budget … and to focus on investing what resources we do have in programming that will attract larger and larger audiences and thereby increase our revenue.”

According to tax documents obtained by the paper, the organization’s expenses exceeded revenue by more than $27 million between 2009 and 2011.

At least part of symphony’s financial troubles can be tied to the flooding of the Cumberland River in April 2010, which left several of the city’s venues under water. The Schermerhorn Center sustained nearly $40 million worth of damage and was closed for eight months following the flood.

The orchestra is reportedly in active negotiations with banks to secure a new deal.

“Our objective is to try to negotiate with our lenders so that we pay as much as we can on this enormous debt,” treasurer Kevin Crumbo told the Tennessean.