The University of Utah issued more than $163 million in bonds to build new housing on its campus.
The bonds mature between 2026 and 2053, with yields ranging from 2.86% to 3.83%. The securities received a rating of Aa1 from Moody’s Investors Service and AA+ from S&P Global Ratings.
The issuance will facilitate the construction of so-called West Village Housing, which will replace old buildings with higher–density housing for graduate students and students with families.
“The buildings currently used to house graduate and family students are more than 50 years old, do not meet seismic requirements and have regular utility infrastructure failures,” according to the university’s website. “The West Village Housing Replacement will allow the University of Utah to continue to provide this resource that has contributed to so many students’ success.”
The investment in on-campus housing comes as the university aims to meet increasing enrollment demand. Freshman enrollment increased 3% for Fall 2022 from the previous year, and applications for Fall 2023 are up 11% over last year.
The school expects to finish constructing a preliminary phase of the project this summer. The new housing is expected to add 500 beds to the university’s stock of on-campus housing.
The second phase of the project will see the construction of 450 additional apartments, a daycare, and a central utility plant. The university expects the construction of phase two projects to cost about $167 million.
Sustainability will be integrated into the project, which is expected to achieve a minimum of LEED Silver, a certification of green credentials.
The university received legislative approval for the issuance earlier this year, in an authorization that allowed up to $214 million in bonds.
Wells Fargo Securities and Morgan Stanley & Co. LLC served as underwriters on the issuance, purchasing the bonds for almost $185 million. The price reflected a premium of $21 million.