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Florida State University Sells $306 Mln in Bonds

By Munichain News Desk

The governing body of Florida State University (FSU) issued $306.3 million in bonds to finance renovations to the university’s football stadium.

The State of Florida Board of Governors sold $281.3 million in tax-exempt bonds and $25 million in taxable bonds. The tax-exempt bonds mature between 2025 and 2053, yielding between 3.18% and 4.43%. The taxable bonds mature between 2025 and 2028, yielding between 4.82% and 5.16%. 

The securities received an underlying rating of AA- from Fitch Ratings and Aa3 from Moody’s Investors Service. They received an insured rating of AA from S&P Global Ratings.

The rating incorporates the university’s “close strategic alignment with athletics and prospects for active management,” Moody’s analysts wrote.

The university will use the bond proceeds to make upgrades to the Doak S. Campbell stadium and build a standalone “football operations facility.” The renovations will reduce the seating in the football stadium by about 15%, but will increase the amount of premium—more expensive—seats. The two projects are expected to cost $372.3 million, according to the official statement accompanying the sale of the bonds.

The bonds are special obligations of the state’s board of governors, payable by certain revenues generated by the FSU Athletics Department. About two-third of athletics revenue in fiscal year 2023 was pledged revenue, according to the bond documents.

J.P. Morgan Securities LLC served as underwriter on the tax-exempt bonds, purchasing them for $298.5 million. The price reflected a premium of $18.8 million and a discount of $1.6 million. Robert W. Baird & Co, Inc served as underwriter on the taxable bonds, purchasing them for close to par. 

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