The Maine Finance Authority issued $66.9 million in bonds to finance the construction of a new dorm.
The bonds mature between 2027 and 2035, yielding between 2.91% and 3.05%. They pay interest at 5%. The securities received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings.
“Affirmation of Colby College’s Aa2 issuer rating reflects its market position as a highly selective college with exceptional student demand trends, including plans for further enrollment growth that will fuel revenue gains and supports its excellent strategic positioning,” Moody’s analysts wrote.
The issuance comes as Colby, a liberal arts college in the central Maine town of Waterville, becomes increasingly selective. The college predicts that it will accept just 6.8% of students in 2027, down from 10% today. Colby enrolls around three hundred more students than it did in 2019.
It may need more housing to accommodate these students. Colby will use the issuance proceeds to fund the construction of a new residence hall that is expected to house 217 students.
The cost of attending Colby will increase as it builds the new dorm. The all-in cost of attending the school, which includes tuition, fees, and room and board, will be more than $87,000 next fiscal year, according to the official statement accompanying the sale of the bonds.
The bonds are special obligations of the Maine Finance Authority and unsecured general obligations of Colby College, payable by its revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $75.6 million. The price reflected a premium of almost $9 million. PFM Financial Advisors LLC acted as municipal advisor.