The University of Connecticut plans to issue about $300 million of general obligation bonds under its
UConn intends to sell $250 in new money and refund about $50 million. The refunding amount could vary "depending on the rates when we go to market," said manager of treasury services John Sullivan. According to Sullivan, the university expects to sell retail for the Series 2015A bonds March 27 and 30.
JPMorgan is lead financial advisor. The refunding and new-money bonds will mature in 2026 and 2035, respectively.
The university is coordinating the sale along with state Treasurer Denise Nappier's office. The bonds are university GO obligations, additionally secured by a state debt service commitment pledge. Individual orders for a $202 million sale in April 2014 exceeded $168 million, which Nappier at the time called the highest level for the $2.3 billion, 20-year program.
State lawmakers originally enacted the program in 1995 and amended it five times, most recently last year. The 2014 measure, called Next Generation Connecticut, added $1.4 billion in state debt service commitment funding and extended the program through fiscal year 2024.
The school over the next decade looks to expand educational opportunities, research, and innovation in the science, technology, engineering, and math, or STEM, disciplines.
"The program has redefined the university to be not only the top public university in New England, but also a nationally recognized contender in the ring of public universities," said Sullivan.
The university has targeted $160 million from the pending sale toward reconstruction of the UConn Health Center in Farmington, including its John Dempsey Hospital, and $90 million for improvements to its flagship in Storrs and regional campuses.
A new, 11-floor patient care tower at UConn Medical will include key patient areas such as the emergency department, surgery suite, and inpatient rehab space. Dempsey work will involve a renovation to several departments and upgrades to utility and electrical systems.
Campus improvements include $21 million for a new 115,000-square-foot engineering and science building in Storrs; $20 million for "residential life facilities," or dormitory enhancements; and $15 million to relocate UConn's Greater Hartford campus from West Hartford to downtown Hartford, anchored by the old Hartford Times building on Prospect Street. The school expects classes there to open in fall 2017.
Fitch Ratings and Standard & Poor's rate the bonds AA-minus and AA, respectively, both with negative outlooks. Moody's Investors Service rates them Aa3 and stable. Fitch linked the bonds to the state's credit.
"The negative outlook reflects the state's reduced fiscal flexibility at a time of lingering economic and revenue uncertainty," Fitch said in a report.
Pullman & Comley LLC is bond counsel. The Law Offices of Joseph C. Reid PA is co-bond counsel. Hawkins Delafield & Wood LLP and Lewis & Munday PC are co-counsel to the underwriters. Day Pitney LLP is disclosure counsel for the state.
