The New Jersey Educational Facilities Authority issued $160 million in bonds to refund bonds it sold a decade ago on behalf of one of its largest public universities.
The bonds mature between 2024 and 2044, yielding between 2.77% and 3.7%. They received a rating of A2 from Moody’s Investors Service and AA from S&P Global Ratings. The authority will loan the bond proceeds to Montclair State University.
The rating “is driven by the university’s very good brand and strategic position as the State of New Jersey’s (A1 stable) second largest public university with a wide array of degree program offerings,” Moody’s analysts wrote.
The issuance follows Montclair State’s acquisition last year of Bloomfield College, a private school that had fallen into dire financial straits. Bloomfield College is the only four-year institution in New Jersey recognized by the U.S. Department of Education as predominantly Black.
“This merger ensures that our commitment to the academic and economic success of young people from traditionally underserved communities will not only continue but will be enhanced,” President of Bloomfield College Marcheta P. Evans said in a statement in 2023.
The issuance proceeds will refund bonds the authority sold on behalf of Montclair State in 2014 and on behalf of Bloomfield College in 2013.
The bonds are special and limited obligations of the authority and general obligations of the university, payable by its revenue. Montclair State now has $393 million in debt outstanding, according to Moody’s.
Goldman Sachs & Co LLC served as lead underwriter on the issuance. Hilltop Securities Inc acted as municipal advisor.