CHICAGO — The Minnesota Office of Higher Education will price $375 million of new-money and refunding adjustable rate student loan program bonds Tuesday.

The deal is broken into two tranches, an A series for $66.8 million of taxable bonds and a B series for $308.2 million of bonds subject to the alternative minimum tax. The rates will be reset weekly although the office can convert the bonds to an alternative rate.

RBC Capital Markets is the underwriter and remarketing agent and Springsted Inc. is financial adviser while Fryberger, Buchanan, Smith & Frederick is bond counsel.

About $275 million of the proceeds will refund outstanding debt with the remainder financing or refinancing new student loans.

The bonds carry a AA rating and top short-term marks from Fitch Ratings and a AA-minus from Standard & Poor’s based on letter of credit support from the Royal Bank of Canada.

The LOC expires Oct. 15, 2015. Interest payments on the A series will be made monthly while interest on the B bonds will be paid semiannually.

The bonds are limited obligations of the authority and payable from pledged revenues from rentals, income, fees, charges and other revenues.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.