Education

Feature Bond – Week of September 23rd; Rutgers University – 100 Year Bond


Feature Bond – Week of September 23rd; Rutgers University – 100 Year Bond ( Old Queens, New Brunswick, Source: Wikimedia Commons )

Rutgers University sold  $330 million in General Obligation Bonds scheduled to mature over the next 100 years during the week of September 16th. The purpose of the bonds is to finance and/or refinance construction of several capital projects on campus and to pay the cost of issuance. The principle underwriters are Morgan Stanley,  Barclays and J.P. Morgan. This week, we are taking a look back to a bond issuance that garnered significant attention from other news outlets.

About the Bonds

Bond issuers were encouraged two weeks ago to sell new debt and lock in low rates at long maturities. New Jersey’s Rutgers University was one notable example, and has finalized the sale of their 100 year bond to begin the week of September 16th. As many bond issuers jumped on the opportunity to issue century-bonds while the market was pricing them more cheaply, yields jumped dramatically as we saw Friday, September 13th.

Seizing on this trend, Rutgers issued $330 million in bonds that will reach maturity in 2119.   The bonds were sold at par at an interest rate of 3.195%. Interest received or accrued on the bonds will be taxable to a U.S. Holder of the bonds (*see Tax Matters in Official Statement for details).  The bonds are direct and general unsecured obligations of the University, and are not be secured by a pledge of gross receipts or other specified revenues of the University or by a mortgage lien on or security interest in any University property.

These details and more on purposes, security, risks and other matters pertaining to these Rutgers University  can be found in the official statement, provided by MuniOS. After registering, visitors can link directly to the official statement.

Financial Snapshot of the University

Rutgers is the largest university in New Jersey and is the 8th oldest in the United States. It was originally chartered during the colonial era before American Independence from Britain. The university has over 40,000 undergraduate students and over 20,000 graduate students enrolled. Read more about Rutgers financial statements directly from their website.

Provided above is a quick snapshot of financial characteristics of the Rutgers University along with the medians for other Public Universities of all sizes, courtesy of Merritt Research Services, LLC. Merritt has many of the sector medians publicly available and regularly updated on their Benchmark Central page. (Merritt believes the data to be reliable but does not make any representations as to its accuracy or completeness).

In addition to the Merritt information related to the featured bond, more information can be found on our municipal bond calendar, city, state, and county pages.

These facts and numbers are for informational purposes, and should not be considered an official disclosure for potential investors. Investors should consult the official statement. None of the information provided should be construed as a recommendation by MuniNet Guide, MuniNet LLC, Merritt Research Services LLC, or any of their employees. Information and analysis is for informational purposes only.

Potential investors should rely only on the official documents and figures provided in the official statement (prospectus). Although the numbers presented in this summary are primarily derived from public documents, including issuer audits, issuer reports and other public sources such as federal reporting agencies , they are not intended to replace official information presented in connection with the bond sale. Medians may differ from official sales documents due to methodology or survey base variances.

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