The Board of Governors of the Colorado State University system sold $55 million in bonds to refund previously issued securities.
The bonds mature between 2027 and 2047, yielding between 2.59% and 4.07%. They received a rating of Aa3 from Moody’s Investors Service.
The rating “reflects the substantial scale of the land grant university with growing student revenue, state funding and sponsored research,” Moody’s analysts wrote. They added that limited financial reserves in comparison to the university’s expenses and pension liabilities “weigh on credit quality.”
The issuance is the third since the Colorado legislature raised the amount of tuition revenue the state university system can use to support its bonds. In October 2022, the system’s board approved the change to allow all of the university system’s tuition revenue (except for that from an online campus) as security for bond issuances. Previously, the board was capped at pledging 10% of tuition revenue toward bonds.
The university system will use the proceeds from the 2024 bonds to refund securities it issued in 2015.
The Colorado State University system has three campuses, including an online course and physical campuses in Fort Collins and Pueblo. It enrolls 56,721 students across the three schools, according to the system’s website. The bonds are special, limited obligations of the university system, payable by its revenue.
Morgan Stanley & Co LLC served as underwriter on the issuance. North Slope Capital Advisors acted as municipal advisor.