A community college in western Michigan sold $15.1 million in bonds to refund previously issued securities.
The bonds, issued by Muskegon Community College, mature between 2025 and 2039, yielding between 2.7% and 3.4%. They pay interest at 5%. The securities received an rating of AA from S&P Global Ratings, which assigned an underlying rating of AA-.
The issuance comes amid declining enrollment at the college, echoing pandemic-fueled enrollment trends at community colleges across the United States. Enrollment at Muskegon fell more than 25% between the 2018-19 academic year and 2022-23, from 6,949 students to 5,144. Nationally, enrollment at community colleges fell 10.1% in 2021 and 8.2% in 2022, according to the nonprofit National Student Clearinghouse Research Center.
As a result of the decline in enrollment, Muskegon has collected less in tuition revenue than before the pandemic; tuition and fees is the largest component of the college’s revenue. However, that decline has been partially offset by increasing state and local backing, in the form of grants and contracts.
Proceeds from the issuance will refund bonds Muskegon Community College sold in 2013 and 2014.
Muskegon Community College is in the city of Muskegon, which lies on a harbor of Lake Michigan about 40 miles northwest of Grand Rapids. The bonds are general obligations of the college, backed by its full faith and credit and payable by property taxes in the community college district.
“Property tax revenue is expected to increase as the county taxable values continue to rise due to increased home sales, new construction and inflation,” the official statement accompanying the sale of the bonds reads.
Huntington Securities, Inc served as underwriter on the issuance. PFM Financial Advisors LLC acted as municipal advisor.