Pennsylvania State University issued $208 million in bonds to make a series of renovations on campus.
The bonds mature between 2024 and 2053, yielding between 2.63% and 3.78%. They received a rating of Aa1 from Moody’s Investors Service and AA from S&P Global Ratings.
“These ratings are indicative of Penn State’s commitment to sound fiscal management and speak to the power of the University’s brand and performance,” Penn State Treasurer Sara Thorndike said in a press release. The ratings are similar to those given to other large research universities.
The bonds come amid rising enrollment at the university’s flagship University Park campus—and falling total enrollment at the university as a whole, which consists of 24 campuses across Pennsylvania. Enrollment at the University Park campus was 48,201 students last year, compared to 46,270 in 2018; enrollment in the university system was 92,357 last year, compared to 97,136 in 2018. The decrease in enrollment was offset by an almost $2000 increase (about 11.5%) in tuition since 2018. As a result, the university’s revenue has increased over the past five years.
The bonds will finance renovations to three residence halls, a building on the medical campus, a building that houses social science research, and several athletic facilities, including the football stadium.
The bonds are general obligations of the university, backed by its revenue.
Barclays Capital Inc served as lead underwriter on the issuance.