The University of Massachusetts (UMass) Building Authority issued $150.5 million in bonds to finance capital improvement projects.
The bonds mature between 2025 and 2054, yielding between 2.74% and 4.11%. They pay interest at 5%. The securities received a rating of AA from Fitch Ratings, Aa2 from Moody’s Investors Service, and AA- from S&P Global Ratings.
Fitch analysts wrote that their rating reflects UMass’ role as the flagship public university in Massachusetts, as well as its strong support from the state. “The rating further reflects UMass’ disciplined approach to its cash flow needs, and the tolerable increase in debt associated with the current transaction,” the analysts added.
The bond proceeds will fund initiatives in Umass’ $1.9 billion capital plan. These include four major construction projects on the university’s flagship Amherst campus. The school is planning additions to its public health and health sciences building, new computer science and engineering laboratories, and the renovation of a building that houses a workplace learning center.
UMass is one of the largest universities in Massachusetts, enrolling 65,855 students, according to the official statement accompanying the sale of the bonds. The bonds are special obligations of the university’s building authority, secured by a pledge of the university’s gross revenue. UMass recorded $2.9 billion in total operating revenue last fiscal year, the plurality of which came from tuition and fees.
BofA Securities, Inc served as underwriter on the issuance. Omnicap Group LLC acted as financial advisor.