North Dakota’s State Board of Higher Education issued $30 million in bonds to finance the construction of a new athletic center at a public college in its capital city.
The bonds mature between 2027 and 2054, yielding between 3.18% and 4.23%. They received an underlying rating of A from S&P Global Ratings, which assigned an enhanced rating of AA.
The board will loan the bond proceeds to Bismarck State College (BSC), a public college in North Dakota’s capital city. In 2018, the board directed BSC to become a polytechnic school.
The college attributes recent enrollment growth—it currently enrolls around 4,000 students—to its polytechnic status. “The College’s new polytechnic mission is attracting a record number of new students,” the official statement accompanying the sale of the bonds says.
Ratings agencies seem to agree. “The ratings reflect our view of BSC’s status as the only polytechnic institution in North Dakota and the surrounding region,” S&P analyst Luke Gildner said in a press release.
BSC will use the bond proceeds to fund the construction of a new academic and athletic center that will replace its deteriorating Armory facility, which houses athletics and the school’s student newspaper.
“Due to its age and physical condition, the Armory presents several life, health and safety issues with its continued use,” according to the bond documents.
The new, 81,00 square foot facility will cost $40 million, three quarters of which will be funded by bonds. It will host the college’s basketball, volleyball, and wrestling teams. And it will feature a rock wall.
BSC will continue to use the Armory as a training facility and as studios and offices for the student newspaper. It is planning to fundraise for improvements by selling naming rights to the building and rooms within it.
The bonds are limited obligations of the North Dakota Board of Higher Education, payable by BSC’s net housing and facility revenue.
RBC Capital Markets, LLC served as lead underwriter on the issuance, purchasing the bonds for $32.1 million. The price reflected a premium of more than $2 million. Piper Sandler & Co acted as municipal advisor.