A Nashville-based public nonprofit sold $187.5 million in bonds on behalf of Belmont University to finance a new medical school.
The bonds, issued by the Health and Education Facilities Board of the Metropolitan Government of Nashville and Davidson County, Tennessee, mature between 2024 and 2053, yielding between 3.46% and 4.69%. They received a rating of A from S&P Global Ratings.
The proceeds will build classrooms and laboratories for a medical school “focused on training diverse physician leaders who embrace and value a whole-person approach to healing,” according to the official statement accompanying the sale of the bonds. They will also finance the construction of a 719-bed residence hall.
The issuance comes amid a burgeoning national shortage of doctors. The association of American Medical Colleges (AAMC) projects a shortage of up to 124,000 physicians by 2034. “The nation’s demographics—particularly population growth and aging—serve as the primary driver of increasing demand for physician services,” according to AAMC.
The medical school is not yet accredited, but Belmont expects a decision on accreditation by October. It is one of six institutions currently seeking medical school accreditation, according to Bloomberg.
The bonds will more than double Belmont’s outstanding debt, according to S&P. After the issuance, Belmont will owe $314 million over the next 30 years.
The bonds are special limited obligations of the board, payable by Belmont revenue generated primarily through tuition.
Truist Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $197 million. The price reflected a premium of $10 million.