CHICAGO – The University of Chicago plans to sell up to $400 million of debt through the Illinois Finance Authority to refund existing bonds and finance an ongoing capital program that includes new and renovated facilities, according to IFA documents.
The deal was advanced along with others for a handful of schools, healthcare providers, other not-for-profit organizations, and borrowers at an IFA board meeting last week.
The University of Chicago received preliminary approval for its issue that would provide up to $200 million of new money for the planning, design, and construction of various facilities including the William Eckhardt Research Center, the university’s laboratory schools, and other educational, research, and administrative facilities on its campuses.
The university may also refund up to $200 million of tax-exempt bonds depending on savings levels. It has told the IFA that it may also sell up to $300 million in taxable bonds on its own. “Both sizing and interest rate modes to be determined based on evaluation of market conditions by the university and its financing team at pricing,” read IFA documents.
The university carries current long-term ratings of Aa1 from Moody’s and AA from Standard & Poor’s. The bonds would represent a general unsecured corporate obligation of the school and not be secured by a mortgage or security interest on university assets.
Morgan Stanley is senior manager with JPMorgan serving as co-senior manager. Cabrera Capital Markets LLC, Loop Capital Markets LLC, and Northern Trust Securities are co-managers. Chapman and Cutler LLP is bond counsel.
DePaul University in Chicago, the largest Catholic university in the nation, won preliminary approval for an advance refunding of up to $42 million from a 2004 issue for present value savings of between 2.50% and 3%.
DePaul carries ratings of A-minus from Fitch Ratings and Standard & Poor’s and A2 from Moody’s. DePaul won an upgrade early this year from Moody’s to A2 from A2 in recognition of its consistent positive operating performance and established student market. It carries $304 million of debt.
Goldman Sachs is the senior manager and Loop is co-manager. Chapman is bond counsel. The school has an enrollment of nearly 25,000 and operates two main campuses in Chicago and three satellite campuses near O’Hare International Airport and in the suburbs.
The People Gas Light and Coke Company, a subsidiary of Integrys Energy Group Inc., received final approval for its plan to current refund up to $50 million of gas supply revenue bonds from a 2003 issue for savings.
The company carries ratings of A1 from Moody and A-minus from Standard & Poor’s. The private company has another $225 million of outstanding municipal debt. KeyBanc Capital Markets Inc. is senior manager with Cabrera and Samuel A. Ramirez & Co. Inc. serving as co-managers. Chapman is bond counsel.