The Regents of the University of Minnesota sold $43.8 million in bonds to refund previously issued securities.
The bonds mature between 2025 and 2038, yielding between 2.55% and 3.04%. 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 affirmation of the University of Minnesota’s Aa1 issuer rating reflects its excellent brand and strategic positioning derived from its strong student and research market positions and ample financial resources,” Moody’s analysts wrote.
The university will use the issuance proceeds to refund bonds that it sold in 2013 and 2014. The issuance adds to an additional $107 million in refunding bonds the university sold earlier this month.
The University of Minnesota is the state’s flagship university. It enrolls 68,366 students across its five campuses, according to the official statement accompanying the sale of the bonds. Almost one-third of university operating revenue, which totaled $2.7 billion in fiscal year 2023, comes from tuition and fees, according to the bond documents.
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 $50 million. The price reflected a premium of more than $6 million. Janney Montgomery Scott LLC acted as municipal advisor.