UMass sells $284 million in bonds to fund construction projects

By Chelsie Field

Maria Uminski/Collegian

The University of Massachusetts system has sold $284 million in bonds to help fund construction projects across the school’s five campuses, officials announced in a press release.

The bonds will fund projects in all stages, including completed, in-progress and future undertakings.

A construction bond is a form of insurance and a method of debt investment designed to ensure the completion of a project by its intended deadline. Investors collect interest over the life of the bond and are returned their initial investment after the bond’s – and project’s – end.

Targeting both “individual and institutional investors,” $212.8 million in tax-exempt bonds at a rate of 3.834 percent, along with $71.7 million in taxable bonds at a rate of 3.976 percent, were sold by the UMass Building Authority in a two-day sale last week, for an average interest rate of 3.865 percent, the release said.

In the release, University officials praised the opportune rates.

“These rates will save the University millions of dollars in debt-service payments over the life of the bonds and reflect the confidence that investors have in the management and fiscal policies of our campuses and system,” said Katherine Craven, the executive director of UMass Building Authority, in the release.

In their report to investors, three credit-rating agencies – Standard & Poor’s, Moody’s and Fitch – gave the University strong ratings due to its “sound management practices and emphasis on efficiency,” according to the release.

According to the release, specific projects benefiting from the borrowing include the construction of Commonwealth Honors College Complex, which is slated to open on the Amherst campus next semester; roadways and infrastructure projects at UMass Boston; UMass Lowell’s $80 million Emerging Technologies and Innovation Center, which opened this past fall; a biomanufacturing center at UMass Dartmouth; and UMass Medical School’s purchasing of three additional buildings adjacent to its campus.

“Our building program will help our economy in the short term as a result of creating construction projects across the state and will yield long-term economic benefits by producing the people and ideas that will drive the Commonwealth’s innovation economy,” said UMass President Robert Caret in the release.

Chelsie Field can be reached at [email protected]