The Dormitory Authority of the State of New York issued $600 million in bonds to finance campus improvements.
The tax-exempt bonds mature on July 1, 2054, and yield 4%. They pay interest at 5.5%. The securities received a rating of Aa1 from Moody’s Investors Service and AA from S&P Global Ratings.
The rating “incorporates Cornell’s superior student market strength as a highly selective university with national and global draw which underpins its exceptional brand and strategic positioning,” Moody’s analysts wrote.
The bond proceeds will fund campus improvements at Cornell’s primary campus in Ithaca, New York. The issuance will also finance upgrades at the university’s medical campus, Weill Cornell Medical Center, in New York City.
Cornell became the fourth university this year to sell more than $1 billion in bonds, following Harvard, Princeton, and the University of California system. Cornell sold $500 million in taxable bonds earlier this month.
The bonds are special, limited obligations of the Dormitory Authority of the State of New York and unsecured general obligations of Cornell, payable by the university’s revenue. Cornell recorded $5.4 billion in operating revenue last fiscal year.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $673 million. The price reflected a premium of $74.6 million and a discount of $1 million. The Yuba Group LLC acted as financial advisor.