Student housing focus of Ohio Wesleyan University bond deal

Register now

Ohio Wesleyan University will sell $46 million of new money and refunding debt Wednesday that will help finance the renovation and construction of student housing.

The private, four-year liberal arts university, which reported a $2 million deficit in 2018, has been battling declining enrollment in recent years and is hoping the investment in in capital needs, including improving its dormitories, will help buck the trend.


The bonds are being issued through the Ohio Higher Educational Facilities Commission.

The deal includes $32 million of new money. The remainder will current refund bonds the university issued in 2015 and a taxable loan it issued in 2011. The 2015 bond was privately placed with the Delaware County Bank and BMO Harris Bank.

PNC Capital Markets and Stifel Nicolaus & Co. Inc. are senior managers. Squire Patton Boggs LLP is bond counsel. Blue Rose Capital Advisors, LLC is the municipal advisor.

S&P Global ratings rates the bonds A-minus. The outlook is stable. The university will have $47.1 million of debt outstanding following the issue.

“We assessed OWU's financial profile as strong with modest debt levels and low pro forma debt burden, off-set by weaker operations caused primarily by declining net tuition revenue,” S&P said.

Declining enrollment and higher tuition discounts have pressured operations, according to S&P. “We could take rating action if declines in enrollment and retention continue, or if the graduation rates do not improve, or the tuition discount rate continues to rise,” the rating agency said.

University spokesperson Cole Hatcher said that along with improving its facilities, the university’s efforts to reverse the decline has also included new majors including business administration and environmental science, as well as expanding extracurriculars with options including men's wrestling, women's rowing and marching band.

The university has also expanded its orientation and academic support programs support first-year students and boost retention levels.

“We already have seen an improvement in the academic readiness of our incoming students, and we anticipate better retention and increased enrollment as a result of these efforts,” Hatcher said.

OWU is in Delaware, Ohio about 25 miles north of Columbus. About 50% of students come from Ohio while the rest come from 37 states and 16 countries.

For reprint and licensing requests for this article, click here.
Higher education bonds Primary bond market Ohio Higher Educational Facility Commission Ohio
MORE FROM BOND BUYER