The University of Connecticut next week intends to sell $342 million of general obligation bonds for its UConn 2000 infrastructure improvement program, including a $42 million refunding.
UConn will price for retail Monday and Tuesday with its institutional sale set for Wednesday, April 6, according to manager of treasury services John Sullivan. Expected closing is around April 21.
Jefferies is lead manager for the underwriting team.
The new-money and refunding bonds will mature in 2036 and 2027, respectively. The structure is a 20-year level principal.
The bonds are university GO obligations, additionally secured by a state debt service commitment pledge. They are not general obligations of the state, although UConn’s rating is sensitive to changes in the state’s GO rating.
Connecticut lawmakers passed the UConn 2000 act in 1995 and have amended it five times, most recently in 2014.
The latest extension, titled “Next Generation Connecticut,” emphasized a research facility and faculty buildout, notably in science and technology.
Tech initiatives include the arrival of the Jackson Laboratory genomic medicine institute at the UConn Health Center in Farmington, and the construction of a tech park on the flagship Storrs campus for public-private partnerships, primarily in the science, technology, engineering and math fields.
“The UConn 2000 infrastructure improvement program has redefined the university to be the top public university in New England, and also a nationally recognized contender in the ring of public universities,” said Sullivan.
UConn will split new-money construction fund proceeds evenly between its flagship Storrs and regional campuses, and the health center, according to Sullivan.
In the pipeline are 13 projects at Storrs and the regional campuses, and four – notably for new construction and renovation -- at the health center. Campus projects include $76.2 million for dormitories and $20.3 million to cover deferred maintenance.
Standard & Poor’s rates the bonds AA with a negative outlook. Fitch Ratings assigns an AA-minus rating with a stable outlook. Moody’s Investors Service rates them Aa3 and negative.
“The negative outlook reflects the weakening state demographics that have led to budgetary strain,” said Moody’s.
The current UConn 2000 program extends through 2024 and totals $4.6 billion, including $4.3 billion of bond authorization secured by the debt service commitment.
Pullman & Comley LLC and the Law Offices of Joseph C. Reid PA are bond counsel and co-bond counsel, respectively.
Nixon Peabody LLP and Hardwick Law Firm LLC are co-counsel for the underwriters. Day Pitney LLP is disclosure counsel for the state.
Public Financial Management Inc. is the financial advisor.
