At the Trustees Executive Committee meeting held July 31, it was announced that the University has secured a $300 million  century bond at the lowest interest rate recorded for a domestic century bond.

On August 1, the University of Pennsylvania successfully priced $300 million in century bonds at a yield to maturity of 3.61%. This is the lowest interest rate ever achieved on a domestic century bond by either a corporate or non-profit issuer. Century bonds are a rare security with a final maturity in 100 years—in this case 2119—afforded only to the most select and highly-rated institutions. 

In 2012, Penn issued a then-record setting $300 million in century bonds at 4.74% to finance an ambitious slate of campus-wide sustainability initiatives.

Penn will use the newly borrowed funds to support capital projects defined within the University’s Capital Plan, including renovations of existing infrastructure, current capital projects such as New College House West and Wharton Academic Research Building and future capital projects.

Penn’s finance team seized this opportune moment in the markets to take advantage of historically low interest rates and overwhelming demand from investors. Morgan Stanley led the underwriting syndicate. Due to strong investor demand, the bonds were more than five times oversubscribed, leading to a 10 basis point reduction in the credit spread above the 30 Year Treasury from 125 to 115 basis points. 

Responding to the news, Penn’s Vice President for Finance and Treasurer MaryFrances McCourt said, “We are delighted with the tremendous investor interest and feel it is a testament to the longevity and financial strength of Penn.” 

The Trustees also approved  a resolution to approve the acquisition of interest in Hajoca Associates, under an agreement from 2003. The 3025 Walnut St. property had been controlled by Dranoff Properties, the third party developer who had  developed it. The building has a ground lease and contains WXPN and and World Cafe Live. Penn would acquire the building and refinance it in three years.