—DALLAS The University of Arkansas plans to issue $41 million of revenue bonds for its Fayetteville and Fort Smith campuses in two deals this month.
An $11 million tax-exempt issue for the Fort Smith campus scheduled to price June 16 will be followed three days later with $24.2 million of tax-exempt and $5.7 million of taxable bonds for the Fayetteville campus.
Stephens, Inc., is sole manager on the Fort Smith bonds and is co-manager with Crews & Associates on the Fayetteville bonds. BFM is financial advisor on the Fayetteville bonds. The system does not use an outside financial advisor on the Fort Smith bonds.
The deals follow an $18 million issue for the Pine Bluff campus and an April issue of $5 million for the Fort Smith campus.
Dennis Hunt, senior vice president for Stephens, said the earlier pricings "went extremely well."
"The market was extremely favorable on those issues, and we expect the same this time," he said.
The upcoming bonds are rated Aa2 by Moody's Investors Service with a stable outlook.
The rating "reflects the system's role as the largest provider of higher education in Arkansas, diverse revenues supporting balanced operating performance, philanthropic support and manageable debt burden," Moody's analysts Dennis Gephardt and Susan Fitzgerald noted in their June 10 report. "The stable outlook incorporates expectations of continued solid student demand, healthy operating performance and maintenance of flexible reserves."
Bond proceeds will finance construction of a student wellness and recreation center on the Fort Smith campus. The Fayetteville campus will get a new research building and other improvements.
Taxable bonds will be used to improve a fraternity house on the campus.
The Fayetteville campus is the system's flagship with 22,171 students. The Little Rock campus is the second largest with 8,825 students. The other campuses in the UAR system include University of Arkansas for Medical Sciences, Fort Smith, Monticello and Pine Bluff.
The system has five community colleges in Hope, Phillips, Morrilton, Cassatot and Batesville.
"The operations of the University of Arkansas for Medical Sciences and the University Hospital of Arkansas expose the system to challenges within the healthcare sector in the current economic environment, including potential reimbursement pressures from third party payers, rising charity care, and softening volume trends," the Moody's analysts said.
