Washington University Series 2020A Taxable Fixed Rate Bonds
Bond Sale Date: March 26, 2020
$450,000,000 Series 2020A Taxable Fixed Rate Bonds
About Washington University
The Washington University (“Wash U”) is a private research university in St. Louis, MO founded in 1853. Wash U is comprised of seven schools and has over 15,000 FTE enrollment, with students from all 50 states and more than 100 countries. During the 2018-2019 academic year, Wash U awarded 1,823 bachelor’s degrees and 2,197 master’s degrees from more than 77 established majors. The academic talent of Wash U’s undergraduate first year class ranks high among the nation’s universities as indicated by an average SAT score of 1510, compared to a national average of 1059.
Wash U also operates a School of Medicine with 21 departments, over 2,200 full-time faculty members, and a distinguished research function. The School of Medicine partners with BJC Healthcare as its primary teaching hospital affiliate, both for adult and children’s care. Total revenues for 2019 were over $3.5 billion, with over $1.3 billion coming from patient services.
Credit Ratings: Aa1/AA+ (Moody’s/S&P)
Focus on Value
Ponder & Co. (“Ponder”) worked closely with Wash U’s management and governance during the past six months to plan and execute the sale of a publicly-offered taxable fixed rate bond issue for a combination of new money projects and the advance refunding of the Series 2011AB bonds. In addition, Ponder worked with Wash U to extend and settle a Treasury-lock, used to hedge the refunding portion of the issue.
Ponder supported Wash U through all aspects of the financing, including plan of finance development, rating agency call preparation, and working with underwriters to achieve the most favorable bond sale pricing. Ponder ran a competitive bid and negotiated document terms for the Treasury-Lock extension.
Ponder worked with Wash U management to navigate the volatile markets and secure a financing that would provide optimal results. On pricing day, Wash U received strong demand with 6.9x subscription of final orders from over 50 unique investors. With high demand, credit spreads were able to be tightened by 27 basis points. Wash U locked in an all-in cost of capital of 3.23%.
Additionally, Ponder was able to negotiate a settlement calculation methodology for the Treasury-lock that netted Wash U savings of over $1.1 million in termination cost versus the traditional methodology.