NEWS BRIEFS
MIT sells $550 million in long-term bonds
In an effort to raise capital to fund academic projects, campus development, and research, MIT sold $550 million in Series B Taxable Revenue Bonds, according to MIT News.
The bonds mature in 2114 with an annual interest rate of 4.678%, significantly lower than the rate on the last round of century bonds MIT sold in 2011. Those bonds, which MIT used to raise $750 million in capital for the exact same purposes, had an annual interest rate of 5.623%, which Dave Kansas of The Wall Street Journal’s MarketBeat called “super-duper low” at the time.
Locking in on this “historically low cost of capital for a very lengthy period of time” was part of the motivation for the move, according to MIT News.
The capital raised by the bonds, “combined with gifts and internal funding sources, will provide MIT with flexibility in scope and timing to support the acceleration of campus renewal as well as other strategic research buildings and infrastructure projects over the next decade,” MIT News wrote, echoing closely their description of the 2011 bonds.
MIT will make periodic payments on the interest and pay the principal when the bonds mature. The bonds, which are rated AAA by Standard & Poor’s, are likely to be purchased by individuals, pension plans, mutual funds, and insurers, according to MIT News.
—William Navarre