LOS ANGELES — Gonzaga University has postponed its $47.5 million sale of taxable revenue bonds to help finance the construction of its new University Center facility.
A new date for the deal, which was originally scheduled to price Tuesday, has not yet been set.
Chuck Murphy, vice president for finance at the university, said it plans to wait for a situation where the market firms up a bit.
Bank of America Merrill Lynch is the underwriter. Koegen Edwards LLP is bond counsel and Prager & Co. is the financial advisor.
In addition to financing construction of the new 167,726-square-foot, three-story University Center, proceeds from the bond sale are to be used for additional capital improvements to other university facilities, Murphy said.
The $60 million University Center project-the largest-value construction project in the university's history — will be located on Gonzaga's Spokane, Wash., campus. A groundbreaking ceremony was held earlier this month and construction is scheduled to begin in August. The center is expected to be complete in the fall of 2015.
The center, designed by Opsis Architecture of Portland, Ore., and Bernardo-Wills Architects of Spokane, will be used for community activities, including student clubs and organizations, student body association, the University Ministry, and Center for Experiential Leadership. It will also house an 800-plus seat gathering space, dining services, and study lounges.
The new bonds are to be payable from unrestricted gross revenues, which include all money, fees and tuition, rates, rentals, and other income of the university.
Moody's Investors Service assigned the bonds an A3 rating and stable outlook and affirmed the rating on the university's outstanding revenue bonds.
"The A3 rating reflects Gonzaga's favorable operating margins and cash flow, consistent growth in net tuition revenue and sound fiscal management which has allowed the university to grow expendable resources," Moody's analysts wrote in a report. "Offsetting these factors is limited balance sheet strength from higher debt burden, increasingly competitive student market, and relatively low monthly liquidity to support operations."
The stable outlook reflects Moody's expectation that the university will maintain healthy operating performance through sound fiscal management, while improving financial resources through operating surpluses and fundraising.