Liberty University sold $100 million worth of taxable bonds to finance construction projects across campus.
The university made its second initial public offering (IPO) in the past two years on Jan. 11. According to Chancellor Jerry Falwell Jr., financial advisors recommended that the university borrow close to what it would be spending over the next five years for construction projects due to low interest rates.
These interest rates, Falwell said, will be locked in at 5.1 percent for the next 30 years.
“It’s just good business practice,” Falwell said.
For the first time, Liberty received a rating from Moody’s Investors Service with an A1 rating, meaning. that the school has a strong likelihood to pay back what it owes. Standard and Poor’s rated the school AA, a very strong capacity to meet its financial obligations, Falwell said. Liberty’s credit rating places it among the nation’s top 80 universities in financial strength.
“That is quite amazing given that Liberty is only 40 years old, much younger than most of the nation’s wealthiest schools,” Falwell said.
According to Falwell, Liberty only borrowed one third of the amount of money that it currently has on hand. The school, Falwell said, is on track to having $1 billion in net assets within a year or two.