Federal Recovery Zone Economic Development bonds will save Metropolitan State College up to $20 million in interest cost on construction of a new academic building on the Denver campus, school officials said last week.
Metro, a four-year and graduate-school college on downtown Denver's Auraria Campus, issued $46 million of the revenue bonds in a negotiated deal with JPMorgan.
With the backing of Colorado, the taxable bonds carried enhanced ratings of AA-minus from Standard & Poor's with an underlying A. Moody's Investors Service issued a Aa3, with an underlying A2. The RZEDBs were not rated by Fitch Ratings. The issuer receives a 45% subsidy from the U.S. government to help pay interest on the bonds.
Bonds maturing in 2027 with a 5% coupon drew a yield of 4.33% in initial pricing. Average all-in interest cost came to 3.35%, which Metro State president Stephen Jordan called the lowest in Colorado since the 1960s.
"We are so appreciative of the work of Colorado Commission on Higher Education and the treasurer's office in providing Metro State with the opportunity to use the Recovery Zone Economic Development bond," Jordan said in a prepared statement.
Serving primarily commuters in the Denver-Boulder area, Metro State has grown steadily over the past few years to more than 22,000 students. It shares the Auraria campus on the banks of Cherry Creek with the University of Colorado at Denver and Denver Community College.