Brown University will establish a tax-exempt commercial paper notes program on Dec. 19.
Although the commercial paper program is authorized to issue up to $50 million, the initial CP deal is internally limited to $23 million by Brown, and future issuance of the notes would require further authorization by the Brown University Corp.
Goldman, Sachs & Co. is the commercial paper dealer for the sale, and Partridge Snow & Hahn LLP is bond counsel. Prager, Sealy & Co. serves as financial adviser.
Moody’s Investors Service has assigned a P-1 rating to the university’s tax-exempt commercial paper program. Moody’s also affirmed its Aa1 rating on Brown’s fixed-rate bonds, the Aa1/VMIG1 rating on the variable-rate demand bonds, and the P-1 rating on the taxable CP program.
The tax-exempt CP will be used primarily to refinance portions of Brown’s outstanding taxable debt, which was used to purchase a commercial property in Providence, the Moody’s release said. Brown has gradually begun to occupy the building, which is expected to house the its public health program.
The university will refinance taxable CP, originally used to finance the acquisition of the property, with tax-exempt CP, Moody’ssaid. The proceeds of the program may also be used for upgrades to utilities infrastructure and renovation projects on its College Hill campus.
Brown has $448.1 million of rated debt, which includes the commercial paper programs at their full size of $100 million, and the university’s rating outlook remains stable.
