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University of California System Sells $1.1 Bln in Bonds

By Munichain News Desk
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The Regents of the University of California issued $1.1 billion in bonds to refund previously issued securities.

The bonds mature between 2024 and 2045, yielding between 2.24% and 3.38%. They pay interest at 5%. The securities received a rating of Aa2 from Moody’s Investors Service, AA from S&P Global Ratings and AA from Fitch Ratings.

The rating reflects the system’s “growing enrollment and very strong student demand characteristics, consistently solid national/international reputation, steady operating performance inclusive of a sizable and accretive health system, generally steady support from the state of California… and expectations of flexibility and manageable leverage through a sizable capital improvement program,” Fitch analysts wrote.

The University of California system’s revenue has increased in recent years, creating a larger base to secure bond issuances. The system generated $21.2 billion in revenue in 2022-23, up from $19.5 billion the year prior.

The university system will use the issuance proceeds to refund bonds it sold in 2009 and 2010.

The University of California system includes ten campuses and enrolls almost 300,000 students. The regents form the system’s governing body. The bonds are limited obligations of the university system, secured by its revenue.

Jefferies LLC, BofA Securities, Inc, and Barclays Capital Inc served as lead underwriters on the issuance, purchasing the bonds for $1.3 billion. The price reflected a premium of $200 million. PFM Financial Advisors LLC acted as municipal advisor.


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