Clemson University issued $52 million in bonds to finance renovations for a dorm that was built more than 50 years ago.
The bonds mature between 2026 and 2054, yielding between 2.86% and 4.01%. They pay interest at 5%. The securities received a rating of AA from Fitch Ratings and Aa2 from Moody’s Investors Service.
The rating reflects “Clemson’s strong credit quality and stable overall financial profile, with solid and consistent cash flow margins,” Fitch analysts wrote.
The university will use the bond proceeds to finance a $52 million renovation to Manning Hall, a high-rise dorm on campus. Manning Hall is one of a trio of neighboring dorms that the university plans to renovate in the coming years. Together, the three residence halls house more than 1,400 students; their total renovation is expected to cost more than $150 million.
Clemson is a public university in South Carolina and the state’s second-largest by enrollment, after the University of South Carolina. The bonds are special obligations of the university, payable by its revenue (excluding athletics). The university recorded $42.8 million in net revenue last fiscal year, according to the official statement accompanying the sale of the bonds.
Morgan Stanley & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $57.3 million. The price reflected a premium of more than $5 million. PFM Financial Advisors LLC acted as municipal advisor.