The University of California this week announced plans to issue more than $1 billion of taxable Build America Bonds next week, as part of an issuance that will total $1.375 billion.
Proceeds from the UC general revenue bond sale will finance about 70 projects on all 10 UC campuses, officials said.
“Funds from our bond sales will support projects benefiting students, faculty, researchers, and the public while boosting employment in the construction industry and resulting in facilities to be staffed by university employees,” UC chief financial officer Peter Taylor said in a statement.
Barclays Capital and Morgan Stanley are book-runners.
Ahead of the deal, both Moody’s Investors Service and Standard & Poor’s affirmed their ratings for the massive university system: Aa1 and AA respectively.
The bond sale is separate from a recently announced transaction in which the UC system agreed to purchase $199.8 million of privately placed California general obligation bonds.
Proceeds from those state GOs are earmarked for projects on UC campuses, and the transaction allowed the projects to move forward at a time when the state has suspected many bond-financed capital projects because of its ongoing cash crunch.
The UC issued commercial paper to buy the state GO bonds, which pay 3.183% interest and have a mandatory tender in November 2012.
“Interest rates on the commercial paper issued by UC to fund the purchase of the general obligation bond are lower today than the bond-related interest to be paid to UC by the state,” said a UC system news release.