A New York state authority issued $275 million in bonds to finance a series of projects at Columbia University.
The bonds received an AAA rating from S&P Global Ratings and an Aaa rating from Moody’s Investors Service. The bonds mature between 2032 and 2034. The bonds that mature in 2032 will yield 2.59%, the bonds that mature in 2033 will yield 2.63%, and the bonds that mature in 2034 will yield 2.68%.
“We assessed Columbia’s enterprise profile as extremely strong, characterized by exceptional demand as measured by selectivity and matriculation rates, and a relatively low tuition discount rate compared with that of ‘AAA’ medians and peers,” analysts at S&P wrote.
The university has one of the highest tuition rates in the county. For the 2022-23 academic year, the university will charge $62,570 for tuition, with an expected annual cost of $81,680 after accounting for fees and room and board. The bonds will be backed by university revenue.
The projects include a new 34-story apartment building that is expected to house graduate students, upgrades to Columbia Business School, and an aquatic research facility, among other initiatives.
The massive investment could highlight discrepancies between Columbia and its surroundings. In 2021, the median household income in Morningside Heights, the upper Manhattan neighborhood where the university is located, was $56,680, according to the Furman Center for Real Estate and Urban Policy at New York University.
The bonds were issued by a conduit, the Dormitory Authority of the State of New York. The authority provides construction, financing, and other services that serve the public good of the state.
Goldman Sachs & Co. LLC served as lead underwriter on the issuance, purchasing the bonds for $331 million. The price reflected a premium of more than $56 million.