Florida issued $80 million in bonds to build a new student residence hall at the University of North Florida, a public research university in Jacksonville.
The bonds mature between 2025 and 2053, yielding between 38% and 4.9%. They pay interest at 5%. The securities received underlying ratings of A from Fitch Ratings, A2 from Moody’s Investors Service, and A- from S&P Global Ratings, which assigned an insured rating of AA.
The rating “reflects Fitch’s expectation that historically strong demand for housing would support solid debt service coverage, together with the university’s ‘A+’ Issuer Default Rating (IDR), which is attributable to solid demand, moderate cash flow, and strong balance sheet resilience,” Fitch analysts wrote.
The bond proceeds will finance the design and construction of a new 520-bed dormitory for honors students. It is projected to cost $77 million, all of which will be financed by bonds. The university expects the residence hall to open in August 2025.
Demand for on-campus housing has risen in recent years amid rising rents in Jacksonville. Historically most of the university’s 16,550 students live off campus, with preliminary statistics showing just 3,515 living on campus this year, according to the official statement accompanying the sale of the bonds. Rent in Duval County, which contains Jacksonville, has risen by almost 40% over the past two years, according to a study by UNF Professor David Jaffee.
The bonds are special obligations of the university’s board of governors, payable by revenue from the new residence hall and surplus revenue from the university’s existing housing system.
Jefferies LLC served as underwriter on the issuance, purchasing the bonds for $81.66 million. The price reflected a premium of $1.6 million.