Liberty University on Tuesday sold $120 million worth of tax-exempt education facilities bonds, which will allow the Lynchburg-based college to usher in a new era of growth and development. Chancellor Jerry Falwell, Jr. and a contingent of Liberty officials traveled to New York for the sale and pricing of the bonds at its initial public bond offering. Liberty benefits from a recently acquired AA bond rating from Standard & Poor’s, placing it among the nation’s top 44 S&P-rated colleges and universities for financial strength. The AA S&P bond rating was verification of Liberty’s strong financial standing and places it in a class with other outstanding universities including, Cornell University, Emory University and Johns Hopkins University. The bonds were Virginia College Building Authority’s series 2010 revenue bonds issued for Liberty University and underwritten by Morgan Stanley. A significant portion of the proceeds will be used to bring substantial improvements to the academic infrastructure of the university.
“It is very rare for any company to receive a AA rating as its initial credit rating,” Falwell said. Recent examples are Microsoft and Google. Liberty is the second private college in Virginia that currently holds this rating. Washington & Lee in Lexington is the other. “Like other AA-rated universities, Liberty has chosen to take advantage of low interest rates and tax-exempt financing rather than spend its reserves on capital projects,” Falwell continued.
For the past several years, Liberty has been paying for its major capital projects out of its cash reserves. “Institutional investors in Tuesday’s sale included most of the major players in the national bond market,” Falwell said. Bonds were also sold on the retail market Monday. He said there were more orders for bonds than were available.
Liberty’s strong financial footing in recent years has contributed to the high bond rating. Net assets for the university have increased from $100 million in 2007 to $530 million today. The university projects that its net assets will exceed $1 billion by 2014. “In just three years, we have achieved financially what we had hoped to achieve over a much longer time span,” Falwell said. Shortly before the Rev. Jerry Falwell, the university’s founder, died in 2007 he had announced the university was seeking to obtain a $1 billion endowment in the next 10 years.
The rating was bolstered by Liberty’s high graduation rates and the success of alumni finding jobs and their ability to pay back loans.
As Liberty prepares to celebrate its 40th anniversary next year, Falwell said the sale of the bonds “will be used to pay for certain capital projects that have been completed in recent years and will finance the construction of a multitude of new facilities on campus that will greatly enhance the educational experience for students.”
Expansion plans call for a new lawn behind Arthur S. DeMoss Learning Center and a new freestanding library to replace existing older buildings, as well as a host of other construction projects to beautify the campus and add parking facilities. “These projects will revolutionize the look and the feel of campus,” Falwell said. “It is humbling for me to witness God’s blessings of such magnitude on Liberty University. This is a wonderful Christmas gift to Liberty and its students.”
via PR NewsWire