Harrisburg University Misses Bond Payment

Harrisburg University, in Pennsylvania's distressed capital city, defaulted on a $1.8 million bond payment on revenue bonds issued by the Harrisburg Authority, according to a March 5 securities filing.

According to a notice to bondholders posted on the Municipal Securities Rulemaking Board's EMMA website, trustee UMB Bank said the university only made a partial payment of $307,000 on Feb. 28, with $1.8 million due at least 75 days before March 1. UMB drew on the guaranty for $1.5 million, the maximum amount allowed for request during a calendar year, according to EMMA documents.

"The trustee and holders of a majority in aggregate principal amount of the bonds are in continuing discussions with the university on matters relating to the bonds," said UMB, which has retained Reed Smith LLP partner Eric Schaffer in the matter.

The Harrisburg Authority public works agency issued $87.9 million of university revenue bonds in 2007 for a science and technology project at the school, which sits adjacent to the Strawberry Mall downtown.

The city itself exited receivership last week after crafting a financial recovery plan aimed at eliminating $600 million of debt and keeping the 49,000-population city out of bankruptcy.