California State Treasurer Fiona Ma announced the successful closing of $52,995,000 in tax-exempt bonds issued through the California Educational Facilities Authority (CEFA), chaired by Treasurer Ma, for the benefit of Chapman University (Chapman). Chapman will use the bond proceeds to refund its outstanding CEFA Series 2011 bonds and pay costs of issuance related to the Series 2021A bonds.
“The extremely low yields on these bonds will save Chapman millions of dollars, which can be used for the benefit of their students,” said Treasurer Ma.
The Series 2021A bonds were sold as a public offering on March 24, and Chapman was able to realize a net present value savings of $13.9 million, or 21.6% of the refunded Series 2011 bonds. With an all-in true interest cost of 1.198%, yields on the serial bonds ranged from 0.11% for the 2022 maturity to 1.38% for the 2031 maturity. The Series 2021A bonds closed on April 1 and will mature in 2031.
Chapman is a non-profit co-educational institution of higher learning located in Orange, California. It is classified as an R2 research institution (a doctoral university with high research activity) and is the largest independent university in Orange County. It was originally founded in 1861 as Hesperian College. It is organized into eleven schools and colleges and offers a broad spectrum of undergraduate, graduate, credential, and certificate programs, as well as continuing education programs.
CEFA was established for the purpose of issuing revenue bonds to assist private non-profit institutions of higher learning in the expansion and construction of educational facilities. CEFA’s Bond Financing Program provides affordable, tax-exempt bonds to qualified nonprofit higher education institutions that wish to buy or refinance property and equipment, or build and improve campus facilities, in order to better serve its student population and faculty.
Conduit revenue bonds issued by CEFA are special, limited obligations payable solely from payments made by the underlying borrower pursuant to the transaction documents and from funds and accounts established under the transaction documents, and CEFA shall not be directly or indirectly or contingently or morally obligated to use any moneys or assets of CEFA for all or any portion of payment to be made pursuant to the bonds.
For more information on the CEFA Bond Financing Program, please visit CEFA’s website.