Regional News

Pair of Texas Universities Ready $180M for New Facilities

DALLAS — Two university systems based in Denton, Tex., will use more than $180 million of bond proceeds for new facilities, including a satellite campus in Dallas 35 miles to the south.

Texas Woman’s University leads off today with $15.3 million of system revenue bonds for a new fitness center in Denton.

The University of North Texas expects to issue $166 million of system revenue bonds this week for a new 28,000-seat football stadium and a new business leadership building on the Denton campus. A second academic building on the new Dallas campus is expected to be completed by next fall.

Both universities are expanding in Dallas and Fort Worth, the two largest cities in Texas without established state, four-year colleges.

TWU is consolidating its two nursing centers near the site of Dallas’ future Parkland Hospital and the University of Texas’ Southwestern Health Sciences Center.

The $55 million building, financed in part with $20 million of revenue bonds issued earlier this year, is expected to be completed next year.

With the largest nursing doctoral program in the world, TWU has a similar center in Houston. About 41% of TWU’s more than 13,000 students are enrolled in graduate programs.

Near the TWU nursing site, Dallas County is preparing to build a $1 billion replacement of the existing Parkland Hospital using $705 million of Build America Bond proceeds from an issue in August. UT Southwestern is also expanding its campus at the site.

In addition to building a new campus south of downtown Dallas, UNT is planning a medical school in Fort Worth and a law school in Dallas’ old Municipal Building.

TWU expects to close on its bonds Dec. 30 after today’s pricing through negotiation with First Southwest Co. as senior manager. Estrada Hinojosa & Co. and Morgan Keegan & Co. are co-managers. RBC Capital Markets is financial adviser and McCall, Parkhurst & Horton is bond counsel.

Robert Tuggle, associate vice president for finance and administration, said yesterday that no decision had been made on whether to insure the bonds, which are rated A by Standard & Poor’s and A1 by Moody’s Investors Service, both with stable outlooks.

The UNT bonds will be priced through negotiation with Morgan Keegan. The bonds are rated AA-minus by Fitch and Aa3 by Moody’s.

The TWU bonds are backed by student tuition, fees, and other revenue, but not state appropriations.

With this deal, TWU will have $88 million of outstanding debt, according to Moody’s.

The university has identified about $60 million of capital needs in the future, according to analysts.

TWU’s professional programs and its strong relationship with Dallas-Fort Worth-area community colleges represents a source of strength, according to Moody’s analysts Karen Kedem and Laura C. Sander.

“In light of healthy demographic projections for the number of graduating high school students in Texas (19% increase between 2008 and 2018) and a history of attracting transfer students from the community colleges, the university’s management is projecting continued enrollment growth,” they noted.

Among the credit challenges is TWU’s “historically modest fundraising,” the analysts wrote. The university fell short of its $20 million fundraising goal for its Dallas campus.

“As a result, the university will fund approximately $3.8 million of capital projects from its own reserves,” the analysts wrote.



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