The Utah Board of Higher Education sold $111.1 million in bonds to finance various capital projects and refund previously issued securities.
The board sold three sets of bonds. The Series 2024A-1 bonds, consisting of $95.3 million, mature between 2025 and 2044, yielding between 3.26% and 3.98%. The Series 2024A-2 bonds, consisting of $10 million, mature between 2029 and 2034, yielding between 3.27% and 3.33%. The Series 2024B bonds, consisting of $5.8 million, mature in 2029 and yield 5%. All of the bonds pay interest at 5%.
The securities received a rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings, which assigned a stable outlook.
“The stable outlook reflects our expectation that the university’s enrollment growth will continue, and that management and governance will remain sound, enabling continued firm financial surpluses to be generated,” S&P analyst Ken Rodgers said in a press release.
The issuance comes amid rising enrollment at the University of Utah. The school enrolled 35,262 students in 2023, a 7% increase over 2019 levels. It is one of dozens of universities to sell bonds this year, some of which are building new dorms to accommodate an increasing number of students on campus.
The bond proceeds will fund the construction of a new engineering and computing building and a new dorm, as well as several research-related projects. The university will also use the issuance proceeds to refund bonds that it sold in 2014.
The bonds are special, limited obligations of the Utah Board of Higher Education, backed by the University of Utah’s general net revenue. The university recorded $281.7 million in net revenue last fiscal year.
Morgan Stanley & Co LLC and Jefferies LLC served as underwriters on the issuance. Stifel Nicolaus & Company, Inc acted as municipal advisor.