The South Carolina Jobs-Economic Development Authority issued $69.4 million in bonds to finance renovations to residence halls and the basketball arena at Furman University.
The bonds mature between 2026 and 2034, yielding between 3.1% and 3.44%. They pay interest at 5%. The securities received a rating of AA- from Fitch Ratings and A1 from Moody’s Investors Service, which assigned a negative outlook.
The authority will loan the bond proceeds to Furman University, a private liberal arts school in Greenville, South Carolina.
The rating reflects “the university’s strong financial profile in the context of a strong balance sheet driving above-average leverage metrics,” Fitch analysts wrote.
Moody’s analysts wrote that their negative outlook is based on “expectations of continued narrow operating performance, thin debt service coverage and continued student market pressures in the near term.”
The bond proceeds will fund the combination of several residence halls into a “student village” for freshmen. The project is Furman’s largest to date, according to the official statement accompanying the sale of the bonds.
The bonds will also finance the renovation of dorms for upperclassmen and upgrades to the university’s basketball arena.
The bonds are limited obligations of the Jobs-Economic Development Authority, payable by Furman revenue. The university recorded $170.7 million in operating revenue last fiscal year.
Raymond James & Associates, Inc served as lead underwriter on the issuance, purchasing the bonds for almost $79 million. The price reflected a premium of $9.6 million. PFM Financial Advisors LLC acted as municipal advisor.