Higher education bonds

Following the Supreme Court ruling in Carson v. Makin, states with bans on using bond proceeds for religious purposes may be forced to amend such laws.

Moody's downgraded the university and its housing and parking borrowing arm ahead of a bond sale to support the school's goal of increasing on-campus housing.

The Cleveland-based university's 100-year taxable bond landed at a 5.4% interest rate.

Last year the university's investment portfolio grew by 47%, a factor contributing to the university's triple-A ratings.

The Regional Transportation Authority, Chicago Transit Authority and many state universities have drawn positive rating actions as the state's ratings improved.

Moody's upgraded five Illinois public universities after lifting the state government's rating, lifting one to investment grade and putting three others closer.

The Fitch Ratings upgrade to A-plus applies to $80 million in debt issued for the University of Portland in Oregon.

The university will decide on a final structure for a $500 million sale that could go as long as 100 years at the time of pricing, which is expected next week.

Washington University will sell $1 billion of new money with tentative plans to offer a mix of 30-, 40-, and 100-year paper.

Fitch said it expects UT to maintain a strong operating performance that could warrant an upgrade in the next two years.

The enrollment controversy hasn't affected the nine-campus University of California system's bond ratings.

This month the University of Michigan sold $1.2 billion and Michigan State University sold $500 million of taxable 100-year bonds.

The University of Michigan follows Michigan State this month in joining the club of universities offering 100-year bond maturities.

Moody's Investors Service said the upgrade reflected the university's robust, sustainable operating margins supported by consistent growth in tuition revenue.

Michigan State, supported by a better bond rating outlook, will join the small club of higher education institutions using a 100-year taxable bond structure.

Stability at the state government level and the prospects of more aid in fiscal 2023 eased balance sheet pressures on Illinois' public universities.

Despite competitive and demographic headwinds, Villanova's strong academic reputation as a selective private university will support student demand, Moody’s said.

Like peers with big endowments and strong student demand, the private university in Chicago has managed through the pandemic with its ratings intact.

Michigan's flagship public university's enjoys a healthy and diverse balance sheet but the scandal's taint poses other challenges.

Katherine Craven, chief administrative and financial officer at Babson College, discusses the school's business niche, its bond-rating upgrades amid negative outlooks for higher education overall, and the outlook for the sector in the face of the pandemic. Paul Burton hosts. (Recorded on Dec. 23, 2021 and is 25 minutes long.)