The New Jersey Educational Facilities Authority (NJEFA) sold $78.2 million in bonds to make improvements at universities and colleges in the state.
The bonds mature between 2025 and 2038, yielding between 2.5% and 3.05%. They pay interest at 5%. The securities received a rating of A from Fitch Ratings, A2 from Moody’s Investors Service, and A- from S&P Global Ratings.
The ratings are one notch lower than New Jersey’s issuer default rating at each of the agencies. This lower rating reflects the “contingent nature of the debt, which requires annual legislative appropriation for payment,” Moody’s analysts wrote.
The bonds are special, limited obligations of the authority, payable by appropriations from the state of New Jersey.
The bonds will fund improvements at five public institutions in New Jersey: County College of Morris, Kean University, Passaic County Community College, Rowan University, and the College of New Jersey. The securities will primarily finance improvements to “classrooms, experiential learning and administrative spaces generally related to nursing and other health care professions,” according to Moody’s.
New Jersey bond programs have long financed improvements at public institutions of higher education in the state. Since 1966, such programs have raised $19 billion for New Jersey schools, according to the NJEFA website.
BofA Securities, Inc served as underwriter on the issuance, purchasing the bonds for more than $90 million. The price reflected a premium of $12 million. Acacia Financial Group, Inc acted as financial advisor.