DALLAS — Amid an ambitious expansion plan, the University of North Texas Board of Regents is preparing to issue $180 million of system revenue bonds for its Dallas campus and for a new football stadium at the main campus in Denton.
The bonds are expected to price before the end of the month, but the preliminary official statement has not been released.
Fitch Ratings has affirmed its AA-minus rating with a stable outlook, which also applies to the system’s $280 million of outstanding system revenue bonds. Neither Moody’s Investors Service nor Standard & Poor’s has rated the new debt. Previous ratings were A-plus from Standard & Poor’s and Aa3 from Moody’s.
The Series 2009A is backed by all revenues, funds, and balances of the system.
Fitch analysts said that the AA-minus rating reflects the system’s stable student demand and steady enrollment growth, its long track record of positive operations, and strong state support.
Bond proceeds will refinance existing debt and pay for expansion of the Dallas campus. Funds will also go toward construction of a new business leadership building and a football stadium, in addition to costs of issuance and interest.
“Primary credit concerns include the system’s aggressive capital expansion plans; limited fundraising history; and competitive operating environment,” Fitch analysts wrote.
Based in Denton, 30 miles north of Dallas and Fort Worth, UNT is launching one of the most aggressive expansion plans in its history, with a new campus in the southern section of Dallas and development of a law school in the downtown area.
UNT is also one of seven universities identified as a potential Tier 1 university under a plan approved by voters Nov. 3. In an attempt to increase the number of Tier 1 universities from the current three — the University of Texas, Texas A&M, and Rice University — a $500 million research fund was created for future endowments. The fund will grow to $2 billion with appropriations from the Texas Legislature and subsidize research developments at the universities.
In this year’s legislative session, lawmakers approved creation of the UNT law school at the old Dallas Municipal Building in downtown. The historic building, where Lee Harvey Oswald was held and murdered, has served as a traffic court and office building for the city. Dallas last week dedicated a new bond-financed urban park across the street from the building. The Universities Center, where UNT and other universities offer classes, is near the future law school.
Last week the UNT governing board and other divisions of the system announced plans to move their offices from Denton to the Universities Center. With no major state university in Dallas, university systems have sought to capture an increasing share of the unserved market.
Founded in 1890, the UNT System includes UNT Health Science Center. With more than 34,000 students, UNT is the fourth largest university in the state.
