The Illinois Finance Authority issued $79.4 million in bonds to finance the construction of an osteopathic medical school affiliated with the Chicago School, a private university whose main campus is in Illinois’ biggest city.
The bonds mature between 2025 and 2044, yielding between 3.7% and 4.56%. They received a rating of Baa1 from Moody’s Investors Service.
The rating reflects the school’s “very good brand and strategic positioning translating to strong student demand for its graduate health sciences programs, net tuition revenue growth and favorable operating performance,” Moody’s analysts wrote.
The school will use the bond proceeds to fund the development of a college of osteopathic medicine, which grants DO degrees that are similar in function to standard MDs. The school is currently seeking accreditation and plans to enroll its first class in 2026.
The issuance comes amid an ongoing rise in popularity for osteopathic medical schools, an alternative to MD-granting institutions. The number of DOs practicing in the United States has quadrupled in the past thirty years, and one quarter of all medical students are now pursuing DO degrees, according to the American Osteopathic Association.
The Chicago School primarily enrolls graduate students, with a focus on psychology. The school enrolls 1,469 students in its College of Professional Psychology, 995 students in its College of Graduate and Professional Studies, and 175 undergraduates, according to the official statement accompanying the sale of the bonds.
The bonds are special, limited obligations of the Illinois Finance Authority and unsecured general obligations of the Chicago School, payable by its revenue.
RBC Capital Markets, LLC served as lead underwriter on the issuance, purchasing the bonds for $84.7 million. The price reflected a premium of more than $5 million. PFM Financial Advisors LLC acted as municipal advisor.