R.I. Health and Educational Building Corp. issues $90.8 million to support URI, RIC projects

PROVIDENCE, R.I. – The Rhode Island Health and Educational Building Corporation (RIHEBC) has issued $90.8 million in Higher Education Facility Refunding Revenue Bonds to the R.I. Board of Education’s Council on Postsecondary Education.

Responsible for overseeing the operations of the state’s public higher education institutions, the Council is utilizing the tax-exempt bond to refund previous 2005 and 2008 RIHEBC-issued bonds for projects at the University of Rhode Island and Rhode Island College.

The bond resulted in more than $24 million in total debt services savings, averaging approximately $1.2 million annually over the remaining term of the bond issue.

“We are always looking for ways to pass along savings to our students and citizens,” said Dr. Susan LaPanne, Associate Commissioner for Finance & Management at the Board of Education. “This opportunity will free up revenue that we can direct toward improving access and affordability.”

Proceeds of the bond issue also provided $5.4 million for utility infrastructure and pavement improvements in the residential sector at the University of Rhode Island’s Kingston Campus.

“RIHEBC revenue bonding has supported a major share of the University of Rhode Island’s new construction and renovation projects over the past quarter century,” said J. Vernon Wyman, Assistant Vice President for Business Services at URI. “Favorable interest rates on the new financing, combined with 20-percent debt service present value savings from the refinancing of 48-percent of the University’s outstanding revenue bond financing obligations are remarkably beneficial achievements from this transaction.”

“The ability to combine our refunding with the funding needed for improvements at the University of Rhode Island allowed new projects to be financed, without putting an additional debt burden on the University, its students, or the state,” said Robert Donovan, Executive Director of RIHEBC.

The bond issue, with an average true interest rate of 2.66%, contained three series carrying an Aa3 rating on Series A, and an A1 rating on Series B and C.

According to RIHEBC, the amount of interest and orders placed to purchasing this bond issue from both institutional investors and retail investors is a testament to the reputation of the Council on Postsecondary Education and its higher education institutions.