Featured Municipal Bond Issue: Georgetown University — $632 Million in Taxable Revenue Bonds

Georgetown University

Featured Municipal Bond Issue, Week of 1/7/2019:  Georgetown University — $632 Million (Taxable) Revenue  Bonds

This week’s featured bond is a large taxable municipal revenue bond.  Georgetown University is slotted to issue a $305 million Series 2019A bonds scheduled to mature in almost 100 years , October 1, 2118, and $327 million bullet 2019 Series B issue with a bullet maturity on April 1, 2049.  The extremely long maturity on the Series 2019A  issue is highly uncommon and is a testament to the confidence that this private university is regarded as an institution capable of long standing endurance.  The University, located in Washington, DC,  was founded in 1789 and is the oldest Catholic and Jesuit college or university in the nation. The current student enrollment at Georgetown numbers 17,212 (FTE), which is up 5.5% since 2014.  Approximately 55% of the total enrollment for the fall of 2018 related to graduate and professional students.

The Bonds constitute unsecured general obligations of the University.  No specific revenues of the University are pledged to the payment of the Bonds, and the Bonds are not secured by a pledge, mortgage lien or security interest of , on or in any funds or other assets of the University , except for funds held from time to time by the Trustee for the benefit of the Bondholders under the Indenture.  No debt service reserve fund secures the bonds.   The University has other obligations outstanding and there is no limitation on additional bonds being issued.

The 2019A Bond proceeds are expected to be issued for its general corporate purposes,  including but not limited to future capital projects, to refinance indebtedness, refinancing indebtedness,  pay termination costs related to hedge agreements or  to  pay the costs of issuance on the 2019A bonds.  The proceeds of the 2019 Bonds are expected to be used by the University (a) to refund or defease all or a portion of the outstanding principal amount of certain of the University’s bonds or the District of Columbia’s bonds issued for the benefit of the University, (b) to pay the termination costs due under certain interest rate hedge agreements and (c) to pay related costs of issuance of the 2019B Bonds.  Details on specific bonds expected to be redeemed can be found in the University’s official statement being issued with these bonds.

The Bonds being issued are rated A2 by Moody’s,  A- by Standard & Poor’s.  As of June 30,2018,  the University reported that it carried $943 million in debt outstanding of which approximately $309 million expected to be refunded or restructured with the 2019 Bonds.   The Book- Running Senior Manager for the 2019 A & B Bonds is Barclays.

Further details on the purposes, tax-status, refunding schedule, and security, as well as other matters pertaining to these Georgetown University revenue bonds can be found in the preliminary official statement, provided by MuniOS.   An audio roadshow is available accompanying the official statement on munios.com.  Interested parties should search by the name of the issuer and register with the site.

Details on the purposes, tax-status, security, as well as other matters pertaining to these Georgetown University bonds can be found in the preliminary official statement, available on MuniOS.

Financial Snapshop Georgetown University Source: Merritt Research Services, LLC