The Virginia College Building Authority issued $100.5 million in bonds to finance improvements at the University of Richmond.
The bonds mature between 2027 and 2054, yielding between 2.44% and 3.79%. They pay interest at 5%. The securities received a rating of AA+ from S&P Global Ratings and Aa1 from Moody’s Investors Service.
The authority will loan the proceeds from the bonds to the University of Richmond, a private liberal arts school in Virginia’s capital.
The rating reflects the university’s “excellent balance sheet strength and strong strategic positioning,” Moody’s analysts wrote.
The issuance comes amid growing demand for the university, which charges almost $80,000 annually for combined tuition and housing and food charges. Applications to the university have grown 22% in the past five years, according to the official statement accompanying the sale of the bonds. “The University expects to maintain its enrollment levels based on a highly qualified and robust applicant pool which grew by 10% for the undergraduate class that entered in fall 2023,” the official statement reads.
The bond proceeds will fund projects to make the university’s campus suitable for an increasing number of students that want to live on campus. These include renovations to Richmond’s library, heating system, and dorms, among other projects. The bonds may also refund securities the authority sold on behalf of the university in 2012.
Most universities in Virginia turn to the college building authority for loans. The University of Richmond bonds are limited obligations of the authority and general obligations of the university.
BofA Securities, Inc served as lead underwriter on the issuance, purchasing the bonds for almost $114 million. The price reflected a premium of more than $13 million. The Yuba Group, LLC acted as financial advisor.