The University System of Maryland issued $104.9 million in bonds to finance a variety of capital improvements and refund previously issued securities.
The system sold the bonds in two series. The 2024 Series A bonds, consisting of $75.9 million, mature between 2025 and 2054, yielding between 2.49% and 4.129%. The 2024 Series B bonds, consisting of $29 million, mature between 2025 and 2028, yielding between 2.52% and 2.95%. The securities received a rating of AA+ from Fitch Ratings, Aa1 from Moody’s Investors Service, and AA+ from S&P Global Ratings.
The rating is supported by the university’s role as Maryland’s “sole system provider of four-year public higher education, strong state operating and capital support over time, a solid history of fundraising and relatively stable enrollment, combined with favorable high school demographic projections, and a large and growing research base,” Fitch analysts wrote.
The university is funded by tuition revenue and disbursements from the state of Maryland. Tuition has increased in recent years, including last year’s 2% hike for undergraduates and 5% hike for graduate students. The state of Maryland is facing a $1 billion shortfall, but that is not expected to affect funding for the university system, according to Fitch.
The Series A bonds will fund a variety of upgrades at the university system’s eleven campuses, including to residence halls, classrooms, and an assortment of infrastructure. The Series B bonds will refund bonds the university sold in 2014.
The bonds are limited obligations of the university system, payable primarily by tuition revenue.
Wells Fargo Bank, NA, served as lead underwriter on the issuance. PFM Financial Advisors LLC acted as municipal advisor.