The governing body of the Texas A&M University System sold $427.4 million in bonds to finance capital expenditures and refund previously issued securities.
The bonds, issued by the university’s board of regents, mature between 2025 and 2054, yielding between 2.98% and 4.381%. They received a rating of AAA from Fitch Ratings, Aaa from Moody’s Investors Service, and AAA from S&P Global Ratings.
Fitch analysts wrote that their rating reflects the university system’s financial profile, which is supported by its “flagship, land grant and research role in the state of Texas, substantial endowment, solid fundraising and stable enrollment.”
The university system will use most of the bond proceeds to fund “eligible projects,” according to the official statement accompanying the sale of the bonds. The system will also use about 20% of the proceeds to refund commercial paper notes.
The Texas A&M University System includes eleven universities and enrolls more than 150,000 students. It is the second-largest state university system in the Lone Star State, after the University of Texas System. The larger system sold $800 million in bonds last month.
The bonds are special obligations of the Texas A&M University System Board of Regents, secured by system revenue. The system anticipates issuing more than $500 million in additional bonds or notes next fiscal year, according to the bond documents.
Jefferies LLC served as lead underwriter on the issuance, purchasing the bonds for $468.2 million. The price reflected a premium of $40.8 million and a discount of $1.3 million. Hilltop Securities Inc acted as financial advisor.