TTU System Issues $300 Million in Bonds
March 30, 2015 | Written by Doug Hensley
The Texas Tech University System recently issued more than $300 million of bonds, continuing to take advantage of low interest rates and improving the financial position of the TTU System.
The bond issuance was approved by the TTU System Board of Regents Pricing Committee on March 17, 2015.
The TTU System issued the bonds, following a recent upgraded credit rating from Moody’s (from Aa2 to Aa1). The higher profile rating resonated with the investor base, allowing for a successful bond issuance with a diversified base, according to TTU System Vice Chancellor and Chief Financial Officer Jim Brunjes.
“All of the early indications were very positive for the bond sale,” Brunjes said. “Great interest was shown in the bond markets as the bonds were substantially oversubscribed in the initial offering.”
Brunjes said two strong investor groups made the bond sale successful. For the Series 2015A (tax-exempt), the group was made up of the TTU System, First Southwest Company (Financial Adviser), Norton Rose Fulbright (Bond Counsel) and Citi (Senor Underwriting Manager). Of the series 2015B (taxable), the group was made up of the TTU System, First Southwest Company (Financial Adviser), Norton Rose Fulbright (Bond Counsel) and Wells-Fargo (Senior Underwriting Manager).
The tax-exempt debt was for $73.255 million in par of almost all new money with a true interest cost (TIC) of 3.26 percent. The taxable debt was for $245.315 million in par. This issuance primarily represented refunding the Series 2006 Bonds, plus new money for projects. The rate was a TIC of 3.09 percent.
“It is important to point out that this is the lowest true interest cost ever for a Texas Tech University System debt issuance,” Brunjes said. “We have steadily taken advantage of lower rates over the past five years by refinancing at every opportunity to the extent possible. After a Series 2006 bond matures in February 2016, the System will have no debt on its books issued prior to 2009. Approximately 80 percent of our debt has been issued in 2012 and 2015, taking advantage of the historic low interest rates.”
About the Texas Tech University System
The Texas Tech University System is one of the top public university systems in the nation, consisting of four component institutions—Texas Tech University, Texas Tech University Health Sciences Center, Angelo State University and Texas Tech University Health Sciences Center El Paso—and operating at 12 academic sites and centers. Headquartered in Lubbock, Texas, the Texas Tech University System has an annual operating budget of $1.7 billion and approximately 17,000 employees focused on advancing higher education, health care, research and outreach.
In 2014, the Texas Tech University System’s endowment exceeded $1 billion, total research expenditures were approximately $200 million and total enrollment approached 47,000 students. Whether it’s contributing billions of dollars annually in economic impact or being the only system in Texas to house an academic institution, law school, and health institution at the same location, the Texas Tech University System continues to prove that anything is possible.