The Regents of the University of Minnesota issued $106.7 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2044, yielding between 2.5% and 3.42%. They pay interest at 5%. The securities received a rating of Aa1 from Moody’s Investors Service and AA from S&P Global Ratings.
The rating reflects the university’s “excellent brand and strategic positioning derived from its strong student and research market positions and ample financial resources,” Moody’s analysts wrote.
The issuance comes as Minnesota public universities seek almost $1 billion in state funds for campus improvements. The leaders of the University of Minnesota system and the Minnesota State University system each requested $500 million in state funding last month, citing aging educational infrastructure across the state.
It is unlikely that the state fully grants either university’s request. In his infrastructure spending plan—also released last month—Governor Tim Walz proposed $100 million in funding for each university system.
The University of Minnesota has taken fundraising into its own hands as it awaits its allocation from the state. The university will use the issuance proceeds to refund bonds it sold in 2013 and 2014.
The University of Minnesota system enrolls 68,366 students across its five campuses, according to the official statement accompanying the sale of the bonds. The regents form the university’s governing body. The bonds are general obligations of the university, backed by its full faith and credit.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for $121.7 million. The price reflected a premium of more than $15 million. Janney Montgomery Scott LLC acted as municipal advisor.