DALLAS - The University of North Texas will shift $45 million of a $222 million deal to a private placement after securing better terms on a refunding that way, an official said.
The remaining $177 million of revenue bonds will price Sept. 30 through negotiation with book runner JPMorgan, led by managing director James Costello. JPMorgan heads separate syndicates for taxable and tax-exempt bonds.
Mary Williams, senior vice president at First Southwest Co., is financial advisor.
The decision to take a private placement offer on $45 million of a 2007 bond refunding came Sept. 24, according to James Mauldin, associate vice chancellor for Treasury at UNT System.
"The private structure has projected to increase savings by at least $2 million over the public market option," Mauldin said.
UNT Regents authorized an issue of up to $380 million, but Mauldin said the smaller amount is more likely.
About $24 million of the bonds will provide new money while the rest are for refunding of outstanding bonds and commercial paper, he said.
"The $380 million was the maximum amount that the board was authorizing to be issued over the following 12 months," Mauldin said. "This would provide the system with flexibility to move quickly if market conditions prompt us to do so. However, we do not anticipate issuing any additional debt in the next twelve months, other than CP for interim financing, at this point."
With restoration of stable outlooks on its AA from Fitch Ratings and Aa2 from Moody's Investors Service, "we anticipate a strong appetite in the market for high quality Texas paper, such as ours," Mauldin said.
If market conditions remain favorable, UNT expects present value savings of more than $4.3 million, or a percentage rate between 9.5% and 11%, Mauldin said.
"We are excited to be returning to the markets with this deal and hope to continue to see very positive results from the enrollment growth and conservative financial management of the system," Mauldin said.
