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Massachusetts Agency Sells $189 Mln in Bonds for Northeastern University

By Munichain News Desk

The Massachusetts Development Finance Agency issued $189 million in bonds to refund previously issued securities that it sold on behalf of Northeastern University.

The bonds mature between 2025 and 2043, yielding between 2.99% and 3.6%. They pay interest at 5%. The securities received a rating of A1 from Moody’s Investors Service.

The agency will loan the bond proceeds to Northeastern, which will use them to refund bonds sold in 2008 and 2014. 

The rating reflects the school’s “excellent brand and strategic positioning as a large urban private university with strong student demand, significant research activity, and solid donor support,” Moody’s analysts wrote.

The issuance comes on the heels of Northeastern’s announced acquisition of Marymount Manhattan College, a performing arts-focused liberal arts college. The merger, announced at the end of May, will make Marymount Manhattan the 14th Northeastern campus around the world. 

Northeastern began expanding in 2011, when it opened a graduate school in North Carolina. It has since designed a global web of campuses, often through acquisitions of smaller institutions, in locations such as London, Miami, and Oakland.  

The strategy has made Northeastern a bigger, wealthier, and more selective university at a time when many higher-education institutions are struggling with declining enrollment and revenues. Over the past decade, applications to Northeastern have almost doubled, as has university revenue, according to the official statement accompanying the sale of the bonds. It now accepts 9% of students, compared to 32% in 2014.

The bonds are special obligations of the Massachusetts Development Finance Agency and unsecured general obligations of Northeastern. The university has $1.6 billion in direct debt outstanding as of the end of fiscal year 2023, according to Moody’s.

Barclays Capital Inc served as lead underwriter on the issuance, purchasing the bonds for $215 million. The price reflected a premium of more than $26 million. The Yuba Group LLC acted as financial advisor.

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