At a time of turmoil for many private universities, the College of the Holy Cross in Worcester, Massachusetts, enjoys a position of strength as it simplifies its debt stack.
The Jesuit college enjoys steady finances and growing student demand as it plans to sell bonds this week to restructure and refinance outstanding debt.
The deal, $80 million of revenue bonds, is set to be priced through the Massachusetts Development Finance Agency.
The bonds are set to mature from 2027 through 2047, callable in 2036. Stifel is the senior manager for the deal, with BofA Securities as co-manager. PFM is the municipal advisor and Mintz is the counsel.
The deal is rated Aa3 by Moody's Ratings and AA-minus by S&P Global Ratings.
Holy Cross takes a conservative approach to its debt, according to S&P's Megan Kearns.
"They make sure that fundraising is really lined up and secured before they issue new debt," Kearns said. Holy Cross has "a pretty conservative level of debt for the size of resources for the institution. And just in general, their overall management philosophy is quite conservative."
Moody's described the college's leverage as "somewhat elevated" compared to its peers, but noted that its total cash and investments are more than six times greater than its total adjusted debt.
This is the college's first issuance since 2022, and its first tax-exempt issuance since 2018.
The 2026 bond proceeds will refund a series of 2008 variable rate demand bonds, converting them to fixed-rate, and "terminate the associated fixed payer interest rate swap," according to an online investor presentation about the deal. They will also refund a tax-exempt series from 2016 for debt service savings.
Finally, Holy Cross will use the bond proceeds to restructure a taxable 2019 term loan, which was intended to provide interim financing. The loan will be converted to tax-exempt and have a longer final maturity.
The deal will streamline the college's overall debt portfolio, Kearns said. After it's issued, Holy Cross will no longer have variable rate debt. She expects it will give the college more "breathing room, in terms of their operations."
Brian Frankel, managing director at Stifel, said the transaction wasn't too complicated to put together.
"We have a strong team," Frankel said, "and we knew at a fairly early stage that these were the elements that were likely to be a part of the financing. And so, no, it all came together quite smoothly."
The deal team expects investors to be "quite receptive," Frankel said.
"It's a prestigious name in the higher education sector, it's a strong credit," Frankel said. "You put those factors together, and you like to think that will be a recipe for success."
Despite all the moving parts of the deal, Frankel said, the end result is pretty straightforward for an investor: "it's a broad revenue pledge harnessing the full strength of the college's credit."
Holy Cross's credit is unusually steady.
The college has carried its AA-minus rating from S&P for 20 years, Kearns said.
There's an oversupply in the higher education sector, especially in Northeast states like Massachusetts. And falling demand in the sector has hit liberal arts schools particularly hard.
Some smaller Catholic institutions
But those trends haven't touched Holy Cross, where enrollment has stayed steady — around 3,000, give or take 100 students — for years.
The school received more than 10,000 applications for the fall of 2025, up 56% since 2021, according to the investor presentation. That allowed the school to be more selective — offering admission to 19% of applicants in 2025, from 43% in 2021.
Frankel and Kearns attribute the college's success to its brand.
"They are an institution that has very strong leadership, and they also benefit from a very strong sense of mission, and they stay true to that," Frankel said. "I think that that's what attracts a lot of students to attend."
The administration wants to hold firm to its brand, Kearns said, and isn't trying to grow the size of the student body.
Holy Cross "does a really nice job of communicating who they are" to prospective students, Kearns said. "They really lean into the fact that they are a Jesuit institution, liberal arts college — no graduate programs — [where] you can still go to a sports game that's satisfying and fun."
Kearns traces Holy Cross's strong demand back to the height of the COVID-19 pandemic. It was part of a group of schools which made SAT and ACT scores optional for applicants.
They saw a "glut of applications," she said, and improved selectivity. For Holy Cross, that improved selectivity has stayed.
"They've seen their acceptance rate go down, while their matriculation rate has increased, which is a very difficult series of metrics to balance, and very impressive," Kearns said.
The college has spent some $388 million over the past 10 years on capital projects, the investor presentation said, including a new student recreation center, performing arts center and student housing.
Holy Cross is also less susceptible to many of the challenges the Trump administration has posed to higher education in the last two years. International students make up just 4% of its student body. And although it receives funds from the federal government, for student aid and for contracts, that's a small fraction of its revenue mix.
66% of the college's operating revenue is net student fees, and 17% is long-term investment income. Both of these revenue streams have steadily grown over the past five years.
Not all Jesuit liberal arts colleges have found Holy Cross's success. Loyola University in Maryland, Kearns noted, has struggled with demand.
