Higher education bonds

The Internal Revenue Service has found that the vast majority of colleges and universities have endowment funds invested in a wide range of securities.

The Indiana Finance Authority Wednesday will sell $20 million of tax-exempt revenue bonds on behalf of the National College Athletic Association.

WASHINGTON — Congress could save billions of dollars by prohibiting tax-exempt colleges and universities from earning arbitrage indirectly through endowments that are invested at higher interest rates than what they are paying on their tax-exempt bonds, the Congressional Budget Office concluded in a report.

Michigan State University today will price $229 million of general revenue bonds to refund outstanding variable-rate debt and commercial paper and pay termination fees related to interest rate swaps.

CHICAGO — While Illinois is still behind in aid payments to its public universities, the rating risk posed by the state’s liquidity problems eased a bit yesterday when Moody’s Investors Service confirmed the ratings of seven of eight public schools and took them off negative watch.

CHICAGO — Michigan State University on Thursday will price $205 million of 40-year taxable Build America Bonds for capital projects. The school in May expects to offer a pair of refunding transactions that will restructure some of its variable-rate demand bonds and refund outstanding commercial paper.

Oklahoma Gov. Brad Henry has signed a bill that authorizes the restructuring of a 2006 bond issue providing matching funds for endowed chairs at state colleges and universities. The state had planned to issue another $100 million in 2009, but debt service on the new bonds was not appropriated by the Legislature.

New Jersey Gov. Chris Christie’s budget philosophy is for the state and local governments to operate more efficiently with less revenue rather than increasing taxes or fees.

Standard & Poor’s placed Peralta Community College District’s general obligation ratings on negative CreditWatch because the school failed to adopt a budget for fiscal 2010.

The North Carolina State University at Raleigh expects to issue $77.5 million of tax-exempt and Build America Bonds on Tuesday.

The Dormitory Authority of the State of New York gave final approval to $791.3 million of bonds at its board meeting yesterday, while also creating a finance committee as required under a public authorities reform measure enacted last year.

The University of North Carolina Chapel Hill has $645 million in deferred maintenance needs and may tap the bond market for the renovations, said a board of trustees report published last week.

WASHINGTON — President Obama’s enactment of a new law yesterday that would require all federally guaranteed student loans to be originated by the federal government has led the state and nonprofit entities that have historically loaned to students to contemplate their future in the market.

CHICAGO — Principal and interest on $14.5 million of bonds issued in 2002 for a Joliet Junior College housing project in Illinois is now due, after bondholders frustrated with the project’s failure to make timely interest payments since 2005 triggered the payment-acceleration provision in the bond indenture last week.

DALLAS — Louisiana’s 14 state colleges and universities were advised at a legislative budget hearing on Tuesday to begin preparing now for a loss of almost $300 million in federal stimulus funds after fiscal 2011.

CHICAGO — Legislation that would allow Illinois’ eight public universities to issue short-term debt to manage through the state’s chronic payment delays ­advanced this week towards a House floor vote.

DALLAS — In its second large deal of the month, the ­University of Texas Board of Regents plans to take advantage of its triple-A ratings with a $373 million refunding issue scheduled to price today.

Moody’s Investors Service last week revised Temple University’s outlook to negative from stable as fiscal challenges at Temple University Health System may affect the school’s balance sheet.

Stanford University is preparing to issue up to $300 million of new tax-exempt debt this month, said treasurer Odile Disch-Bhadkamkar.

CHICAGO — Facing a $13 billion deficit, Illinois Gov. Pat Quinn yesterday unveiled a $52 billion fiscal 2011 budget that cuts spending by $2.4 billion, relies on $4.7 billion in deficit borrowing, and leaves nearly $6 billion in bills unpaid.