The governing body of the Texas State University System sold $609.4 million in bonds to finance capital improvements.
The bonds mature between 2025 and 2054, yielding between 3.14% and 4.11%. They received a rating of AA from Fitch Ratings and Aa2 from Moody’s Investors Service.
Fitch analysts wrote that the issuance is “underpinned by a solid resource base and very strong state support.”
The university system will use the bond proceeds to finance upgrades to its constituent schools. It will also use the proceeds to achieve debt service savings by refunding commercial paper notes.
The Texas State University System is the third-largest by enrollment of the six university systems in Texas, following the University of Texas System and the Texas A&M University System.
Both of those systems have issued bonds recently. Texas A&M sold $427 million in bonds earlier this month, and the University of Texas System issued $800 million in bonds in April.
The Texas State system includes three two-year colleges and four universities: Lamar University, Sam Houston State University, Sul Ross State University, and Texas State University. It is the only public university system in the state without a flagship university, though Texas State University has by far the largest enrollment of the system’s constituent schools.
The bonds are special obligations of the Board of Regents of the Texas State University System, payable by its revenue.
Wells Fargo Bank, NA, served as lead underwriter on the issuance. Hilltop Securities Inc acted as financial advisor.