Institute Sells $250 Million in BondsBy Nancy L. Keuss
ASSOCIATE NEWS EDITOR
MIT has sold $250 million in tax-exempt bonds through the Massachusetts Health and Educational Facilities Authority (HEFA) to help fund pending MIT construction and renovations.
The Institute’s exceptional credit strength helped to make the AAA-rated, variable-rate bond sale a success, the MIT News Office said through a press release. An initial interest rate of 2.30 percent reflects declining market rates and allows for a low cost of capital.
“MIT hit the market at exactly the right time, as evidenced by the low initial rate,” HEFA’s Manager of Educational Programs Liam Sullivan said.
“A percentage of 2.30 is quite extraordinary,” News Office Director Kenneth D. Campbell said. “The permanent rate will be fixed in a week, and this preliminary variable rate indicates that we will get a very favorable interest rate on those bonds.”
Upcoming improvements to the Institute include the undergraduate residence Simmons Hall, a graduate dormitory at 70 Pacific St., the Zesiger Sports and Fitness Center, two new buildings for Computer, Information, and Intelligence Sciences, and the renovation of the Dreyfus chemistry building. Additional projects include the renovation of Building NW30 into a graduate residence, roadway construction, parking expansion, and renovations to utility facilities.
“We’re very pleased with the results of the bond sale and the role that HEFA played,” Treasurer Allan S. Bufferd said. “The bond proceeds will combine with our very successful fundraising efforts to complete these important projects.”
The transaction is a large sale for the HEFA, ranking as one of its top five largest bond issuances this year.
“HEFA is happy to work with MIT and very pleased with the outcome of the sale,” Sullivan said. “I can’t wait to see the buildings in their final form.”
Sullivan noted that, apart from the financial benefit the transaction brings to the Institute, the sale directly benefits the city of Cambridge.
“The final result of construction will provide some striking buildings on campus,” he said
HEFA bonds are sold in the municipal bond marketplace both to individuals and institutional investors.
The organization, established by the Massachusetts Legislature in 1968, is an independent public authority that works with non-profit institutions in Massachusetts to cost-effectively finance capital projects. HEFA also provides financial services, group purchasing, and other programs to non-profit organizations.