The New Jersey Educational Facilities Authority sold $658.6 million in bonds to finance upgrades at Princeton University.
The authority sold the bonds in two series. The 2024 Series B bonds, consisting of $500 million, mature between 2053 and 2054, yielding between 2.66% and 4.03%. The 2024 Series C bonds, consisting of $158.6 million, mature between 2025 and 2044, yielding between 2.42% and 3.26%. The securities received a rating of Aaa from Moody’s Investors Service and AAA from S&P Global Ratings.
The authority will loan the bond proceeds to Princeton University, an Ivy League school in central New Jersey considered one of the most prestigious in the United States.
“The Aaa issuer rating incorporates Princeton’s substantial wealth, with total cash and investments of $35 billion enabling a high level of financial assistance for students, and premier international reputation as a private liberal arts university with a stellar research profile,” Moody’s analysts wrote.
Princeton, which is bolstered by its elite credential, has not suffered the similar financial hazards as many small U.S. universities in recent years. Princeton enrollment grew by 6% from the 2019-20 academic year to 2023-24, and annual tuition increased by 15% during the same period, according to the official statement accompanying the sale of the bonds.
Proceeds from the Series B bonds will fund campus improvements, including new housing for graduate students, library renovations, and infrastructure upgrades. The Series C bonds will refund securities the authority sold on behalf of the university in 2014.
The bonds are special and limited obligations of the authority, and general obligations of the university.
Goldman Sachs & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $718.7 million. The price reflected a premium of $61.3 million and a discount of $1.3 million. Hilltop Securities Inc acted as financial advisor.