The Massachusetts Development Finance Agency issued $45 million in bonds on behalf of the Franklin W. Olin College of Engineering to refund a previous issuance.
The bonds mature between 2034 and 2043, yielding between 3.31% and 4.25%. They received a rating of A2 from Moody’s Investors Service and A from S&P Global Ratings.
The rating “reflects Olin’s strong student demand evidenced by high matriculation and retention rates and healthy liquidity that continues to provide ample coverage of debt and operations,” according to Moody’s.
Founded in 1997, Olin is a selective private engineering college in suburban Boston. The issuance comes as Olin builds its national profile. The school has an acceptance rate of 18% and one of the smallest class sizes among selective institutions.
Graduates in the class of 2022 had an average starting salary of almost $100,000, higher than at elite U.S. universities such as Harvard University and Stanford University. The national average salary for recent graduates is $55,000, according to the National Association of Colleges and Employers.
Last fall, the school enrolled 356 students, and it generated $39 million in revenue in fiscal year 2022. Unlike most universities, the majority of Olin’s revenue comes from its endowment draw rather than tuition. Olin offers half-tuition merit scholarships to its entire student body, averaging about $30,000 per student each year.
The bonds are general obligations of Olin, backed by its full faith and credit and secured by its revenue.
Barclays Capital Inc served as underwriter on the issuance.