Debt pioneer – $160M needed

The University of Toronto plans to issue debt securities, initially to raise $160 million for construction, the National Post Online reported May 16.

The school, which has hired CIBC World Markets and Merrill Lynch Canada as joint advisers on the financing, will be the first Canadian university to sell debt securities to the public.

Moody’s Investor Services assigned the school an Aa2 rating with a stable outlook, one notch above the Aa3 rating that Moody’s gives to provincial long-term debt, the Post said.

The rating incorporates the potential for the university to issue another $300 million of debt over three years, compared to $64 million of currently outstanding long-term debt.

Moody’s estimates the school’s total financial resources are roughly $1.6 billion, of which $440 million is unrestricted and available to support operations, the Post said.

Standard & Poor’s is expected to release a credit rating this week.

For full story, go to the National Post.

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