The Allegheny County Higher Education Authority sold $56 million in bonds to refund securities on behalf of Carnegie Mellon University.
The bonds mature on August 1, 2027, and yield 2.61%. They pay interest at 5%. The securities received a rating of AA+ from S&P Global Ratings, which upgraded the university’s rating from AA.
“The higher rating reflects an improved and sustained enterprise risk profile with improved enrollment, matriculation and selectivity over historical levels and consistent surpluses, and overall balance sheet stability despite significant capital investment,” S&P analyst Jessica Goldman said in a press release.
Carnegie Mellon has become increasingly selective in recent years. In 2023, the university’s acceptance rate fell to 11.4%, down from 15.6% in 2019, according to the official statement accompanying the sale of the bonds
The bond proceeds will refund securities the authority issued for Carnegie Mellon in 2019.
Allegheny County is the second-most populous in Pennsylvania and includes Pittsburgh, where Carnegie Mellon is located. Carnegie Mellon enrolls more than 16,000 students, including undergraduate and graduate students. The university recorded $1.6 billion in unrestricted operating revenue last year.
The bonds are limited obligations of the authority, payable by certain Carnegie Mellon revenue.
Goldman Sachs & Co LLC served as lead underwriter on the issuance, purchasing the bonds for $60.4 million. The price reflected a premium of more than $4.4 million. The Yuba Group LLC acted as financial advisor.