The University of Connecticut issued $97.1 million in bonds to build new student housing on its flagship campus.
The bonds mature between 2024 and 2053, yielding between 3.7% and 4.97%. They received a rating of Aa3 from Moody’s Investors Service and A+ from S&P Global Ratings.
The rating reflects the university’s “excellent brand and strategic positioning, strong state financial support, and substantial wealth and scale,” Moody’s analysts wrote.
UConn is in the midst of efforts to increase its stock of student housing to accommodate rising enrollment.
The bonds will finance the construction of so-called residential life facilities, which include on-campus dormitories, suites, and apartments. The proceeds will contribute to a new, $215 million residence hall at the university’s flagship campus in Storrs. The dorm will include 650 beds and a 500-seat dining hall. It is expected to open next fall.
The number of first year applications and enrollment at the university each increased by more than 11% from 2021 to 2022, according to the official statement accompanying the sale of the bonds. The number of first year applications increased an additional 14% from 2022 to 2023.
UConn enrolls almost 50,000 students across five campuses in Connecticut. The bonds are special obligations of the university, payable by some mandatory student fees and net revenues from student housing, dining, and parking facilities. In addition, Connecticut covers debt service on 80% of the university’s direct obligations through annual appropriations.
Loop Capital Markets LLC served as lead underwriter on the issuance, purchasing the bonds for more than $100 million. The price reflected a premium of almost $4 million.