The governing body of Indiana University issued $102.2 million in bonds to finance capital improvements and refund previously issued securities.
The bonds, sold by the university’s board of trustees, mature in 2034 and yield 3.07%. They pay interest at 5%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The rating reflects the university’s “important role as the state’s flagship public university with a significant enrollment and research profile,” Moody’s analysts wrote.
The issuance comes amid a slight decline in enrollment, threatening to decrease the base that the university uses to secure its bonds. Total enrollment at the Indiana University’s campuses has fallen by 3.7% since 2019, though it ticked up slightly between 2022 and 2023, according to the official statement accompanying the sale of the bonds That decrease has been driven by a significant drop in enrollment at the university’s Purdue campus, offset by an increase of near equal size at the university’s flagship campus in Bloomington.
The university will use the bond proceeds to upgrade dorms and research labs. It will also use the issuance to refund commercial paper notes that it sold in 2021 and 2023.
The bonds are limited obligations of the university, payable by student fee revenue.
Goldman Sachs & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $118.4 million. The price reflected a premium of more than $16 million.