Higher education bonds

CHICAGO — The fiscal strain in Illinois that has led to record long bill payment delays this week prompted Moody’s Investors Service to downgrade five of eight state-supported universities that are owed $735 million by the state.

DALLAS — The Kansas Development Finance Authority will go to market today with the first sale from a $105 million state authorization that will partially finance a federally operated biohazard research facility, as Moody’s Investors Service lowered its outlook on the state to negative from stable.

CHICAGO — Purdue University in Indiana will enter the market today with $73.6 million of student fee bonds to refinance some of its variable-rate debt into a fixed-rate mode.

SAN FRANCISCO — Former public finance banker Nathan Brostrom has been promoted to executive vice president of business operations of the University of California system.

The state would privatize the Ohio Lottery and the Ohio Turnpike and use the money to fund a college scholarship program under a bill introduced last week by Sen. Kevin Coughlin.

CHICAGO — The University of Minnesota, one of the first borrowers to use the Build America Bond program last spring, enters the market today with $36 million of fixed-rate, new-money bonds that will again tap the federal stimulus program.

The state Legislative Analyst’s Office on Tuesday lambasted one of Gov. Arnold Schwarzenegger’s highest-profile proposals for the year: a constitutional amendment that would require California, starting in 2014, to dedicate no more than 7% of its general fund spending to prisons and at least 10% to public universities.

The Dormitory Authority of the State of New York approved up to $285 million of tax-exempt bonds on behalf of Cornell University at its monthly board meeting yesterday.

Yale University got the green light yesterday to bring $800 million of tax-exempt bonds to market next month, though the offering is expected to be considerably smaller.

Standard & Poor’s last week revised the outlook on seven Illinois state universities to negative from stable due to their exposure to the state’s liquidity problems that have resulted in delays in state aid payments.

CHICAGO — Ohio’s Kenyon College will enter the market today with $102.4 million of refunding bonds to refinance all of its variable-rate debt into fixed-rate mode.

Arizona made a late tuition payment to the three state universities last week, but continued to postpone a scheduled payment from the state general fund.

A proposal to allow the Dormitory Authority of the State of New York to sell bonds for charter schools died last week along with proposed legislation to increase the state’s cap on the number of charter schools.

A group of Allegheny County, Pa., residents angered over the planned closing of Braddock Hospital are trying to stop a $1.17 billion University of Pittsburgh Medical Center refunding deal and anticipate filing suit against a state conduit agency if it moves ahead with the bond sale.

WASHINGTON — Harvard University has been tapped for one of roughly 40 audits the Internal Revenue Service is conducting this year to examine the financial and business practices of tax-exempt colleges and universities.

Missouri Rep. Chris Kelly, D-Columbia, last week submitted to the General Assembly a bill that calls for a public vote on $800 million of borrowing for higher education projects.

CHICAGO — Cincinnati-based Xavier University will enter the market today with $48 million of general obligation lease rental bonds.

Moody’s Investors Service Tuesday downgraded Spelman College’s debt rating to A1 from Aa3.

The expiration two years ago of the law allowing the 116 industrial development agencies in New York to sell bonds on behalf of nonprofits is changing the landscape for borrowers and issuers.

Fitch Ratings has downgraded Wartburg College’s Series 2005A private facility revenue bonds to BB from BBB-minus with a negative outlook due to a weakened financial profile. The bonds were sold in 2005 through the Iowa Higher Education Loan Authority.