CHICAGO — Cincinnati-based Xavier University will enter the market today with $48 million of general obligation lease rental bonds.

The Ohio Higher Educational Facility Commission will act as conduit issuer.

The bonds will be fixed rate and feature serial bonds that mature from 2013 through 2020 and term bonds that mature in 2025, 2030, and 2040, according to bond documents.

Barclays Capital will senior manage the deal. Fifth Third Securities and PNC Capital Markets LLC round out the underwriting team. Squire, Sanders & Dempsey LLP is bond counsel.

Ahead of the deal, Moody’s Investors Service rated the bonds A3 with a negative outlook. Standard & Poor’s and Fitch Ratings rate the debt A-minus with stable outlooks.

Proceeds from the issue will be used to finance construction of a 525-bed student hall in four connected buildings that includes a dining hall. “This is a self-funding project, so the debt shouldn’t tax our operating budget any further,” said Tom ­Cunningham, assistant treasurer for Xavier.

After today’s transaction, Xavier’s debt will total $206 million, half of which is variable rate. Analysts warned the structure poses risks associated both with the variable-rate mode and a letter of credit from U.S. Bank that supports the debt.

The school might consider shifting some of its debt into a fixed-rate mode to reduce its exposure, according to Cunningham. “There’s not a specific plan in place, but based on some of the concerns mentioned by the analysts we will ­probably look into options for our debt structure,” he said.

Today’s transaction is likely to be the university’s last new-money issue for the next few years, he added. Xavier is limited in the amount of debt it can issue in part because the letter of credit on its variable-rate debt requires a balance-sheet test before borrowing.

“But also internally we really don’t want to take on additional debt at this time,” Cunningham said.

Xavier is a nearly 180-year-old private Jesuit school with a student enrollment of just under 7,000 in the current academic year. Student tuition and fees generate 75% of operating revenue, which is projected to be $148 million this year, according to bond documents.

The school’s dependence on tuition for the bulk of its revenue has forced it to raise prices every year for the last several years. This year’s tuition and fees total $28,570, which is about average when compared to other private colleges that Xavier competes with for students.

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