Michigan State University’s governing body sold $361.6 million in bonds to finance capital improvements and refund previously issued securities.
The bonds, issued by the university’s board of trustees, mature between 2025 and 2054, yielding between 3.09% and 4.13%. They received a rating of Aa2 from Moody’s Investors Service and AA from S&P Global Ratings.
“Despite competitive and demographic challenges, the university’s reputational strength, programmatic diversity, and positive student outcomes will continue to support steady student demand,” Moody’s analysts wrote.
The issuance is Michigan State’s largest since 2022, when it sold $500 million in so-called century bonds, which mature over the course of 100 years rather than the standard 30.
The university will use the bond proceeds to fund projects including the construction of a new biomedical research center in Detroit. Michigan State will also spend the proceeds on several improvements at its flagship campus in East Lansing, such as a new multicultural center, dorm renovations, and a new Dairy Cattle Teaching and Research Center.
Michigan State will also use the proceeds to refund commercial paper notes.
The bonds are limited obligations of the Michigan State’s board of trustees, payable by university revenue.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $398.7 million. The price reflected a premium of $37.9 million and a discount of $800,000. Blue Rose Capital Advisors, LLC acted as municipal advisor.