WASHINGTON — Two District of Columbia universities are tapping the bond markets this week in separate tax-exempt and taxable transactions totaling $145 million.
George Washington University on Thursday expects to sell $100 million of taxable bonds that mature in 10 years, according to bond documents. The bonds are rated A1 by Moody’s Investors Service. A rating from Standard & Poor’s was not available at press time, but it gave a rating of A-plus to taxable debt the university issued last June.
The bonds will be underwritten by Barclays Capital, JPMorgan and Loop Capital Markets, LLC. Hunton & Williams LLP is the bond counsel and Hawkins Delafield & Wood LLP is representing the underwriters.
The bonds are secured by the university’s general revenues and will not have a reserve fund. The proceeds will be used for general corporate purposes.
A spokesperson at GWU declined to answer questions about the deal, referring only to the bond documents for information.
At the start of the fall 2010 semester, the school enrolled 20,654 students in undergraduate and graduate programs, up by 150 students from 2009.
Undergraduate enrollment dipped by 123 students to 9,793 this fall, while the acceptance rate dropped to 32% from 37% in 2009.
Following this week’s issuance, George Washington will have about $1.1 billion of debt outstanding.
Meanwhile, Georgetown University on Tuesday will price $45 million of tax-exempt revenue bonds through the district for a new science center.
Wells Fargo Securities is the underwriter with Squire, Sanders & Dempsey LLP serving as bond counsel. The underwriters are represented Orrick, Herrington and Sutcliffe LLP.
The bonds mature in 2021 and are rated A3 by Moody’s and A-minus by Standard & Poor’s.
At the end of December, Georgetown privately placed $45 million of bonds to Wells Fargo for its still-unnamed science center. This deal represents the second half of financing for the project, said David Rubenstein, the university’s vice president for financial planning and analysis.
He said the school has received a $6.9 million grant for the project from the National Institute of Standards and Technology, a division of the Commerce Department. The grant was awarded under the American Reinvestment and Recovery Act. Construction began last May and the project is expected to be finished in 2012.
Rubenstein said the university does not have additional bonds planned for this year. Georgetown had $892.1 million in total long-term debt outstanding as of June 30, 2010.
Georgetown accepted 3,643 undergraduates last fall, 20.2% of all applicants, and had 15,386 undergraduate and graduate students enrolled. Undergraduate tuition and fees were $40,203 for the academic year.
Standard & Poor’s said Georgetown expects to have operating deficits over the next five years, a concern that could prevent the university from getting an upgrade during the next two years.
Operating deficits exclude the university’s temporarily restricted funds, which are mostly investment returns for current operations.