A Vermont state agency sold $44 million in bonds on behalf of Middlebury College to finance the construction of a new dormitory and other capital improvements on its campus.
The issuance includes $6 million in serial bonds, which mature on November 1, 2043, and yield 3.67%. It also includes a $13 million term bond maturing on November 1, 2045, and yielding 3.75%, and a $25 million term bond maturing on November 1, 2052, and yielding 3.94%. The securities received a rating of Aa3 from Moody’s Investors Service and AA from S&P Global Ratings.
“Middlebury College’s Aa3 issuer rating favorably incorporates its sizable wealth, donor support and excellent reputation as a selective liberal arts college,” according to Moody’s.
The college broke ground on the new dorm in June. The 87,000 square foot building will house 298 students, equivalent to almost half of Middlebury’s standard class size, and open in spring of 2025. All of its bathrooms will be gender neutral. The residence hall will replace a 70-year-old dormitory that will be razed upon the project’s completion and turned into an on-campus art museum.
The issuance comes after Middlebury achieved one of its most profitable fiscal years in a decade, according to Moody’s. The ratings agency expects the college to post a similar financial performance next year.
The Vermont Educational and Health Buildings Financing Agency issued the bonds, and will loan the proceeds to Middlebury. The bonds are general obligations of the college and special obligations of the agency. They will be secured by repayments on the loan.
Goldman Sachs & Co LLC served as underwriter on the issuance, purchasing the bonds for $48 million. The price reflected a premium of $4 million.