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North Carolina HBCU Issues $58 Million in Bonds

By Munichain News Desk

North Carolina A&T State University sold $58.5 million in bonds to finance the construction of a new residence hall on campus.

The bonds mature between 2025 and 2052, yielding between 3.31% and 4.7%. They pay interest at 5%. The securities received a rating of AA- from Fitch Ratings and Aa3 from Moody’s Investors Service, which upgraded its rating from Aa1 in July.

Moody’s analysts wrote that the upgrade was “driven by material growth in financial reserves and favorable trends in enrollment.” They added that “the rating is further supported by the university’s role as the largest four-year Historically Black College and University (HBCU) in the country by enrollment and a STEM focused academic niche including growing sponsored research funding.”

Even as enrollment declined at universities elsewhere in North Carolina and across the country, the number of students attending North Carolina A&T has increased over the past five years. During that period, the university’s total cash and investment has almost tripled.

Funding has been further bolstered by philanthropy, including a $45 million donation by MacKenzie Scott. Prior to the gift, the university had never recorded more than $20 million in donations in a single year. 

With more students has come more demand for housing. “Recent increases in enrollment at the University have created a corresponding increase in demand for student housing,” according to the official statement accompanying the sale of the bonds. The bond proceeds will finance a new 413-bed dormitory, which is expected to open ahead of the 2025-26 academic year.

North Carolina A&T enrolls 13,000 students at its campus in Greensboro. The bonds are limited obligations of the university’s board of governors, payable by university revenue.

RBC Capital Markets, LLC served as lead underwriter on the issuance, purchasing the bonds for $61.4 million. The price reflected a premium of $3 million.

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