MIT raises $550 million through the sale of taxable century bonds
MIT has announced the issuance of its Series C Taxable Bonds in 2021, as part of its broader fundraising efforts within the MIT 2030 framework. These bonds are a means to raise money for MIT's long-term infrastructure and development plans, with the proceeds being used for the ongoing campus renewal and development program.
The Series C Taxable Bonds have a maturity date typically set to match MIT's long-term capital planning horizon, expected around 2051, giving a 30-year term aligned with the 2030 vision framework. The bonds were structured competitively relative to treasury and tax-exempt equivalents at the time, and the specific yield would reflect prevailing market rates for highly rated institutional issuers like MIT.
The funds from these bonds will be used for capital projects supporting MIT’s 2030 plan, which focuses on enhancing campus infrastructure, expanding research capabilities, and sustaining MIT’s long-term academic and research mission. The Series C bonds will continue to support MIT's ongoing campus renewal and development program, as well as academic and research capital projects within the MIT 2030 framework.
Other strategic research buildings and infrastructure projects over the next decade will also benefit from these funds. The Series C bonds, along with gifts and internal funding sources, will enable the continued acceleration of the campus renewal program.
MIT's Series C bonds were rated Aaa and AAA by Moody's Investors Service and Standard & Poor's Ratings Services, respectively. These bonds were unsecured general obligations of the Institute, and JP Morgan and Morgan Stanley served as joint bookrunners for the issuance. The Series C bonds were callable prior to their scheduled maturity through a "make-whole" provision.
Investors in these bonds typically include individuals, pension plans, mutual funds, and insurers. Notably, MIT sold $550 million in Series C Taxable Bonds, maturing in 2114 and yielding 4.678 percent. The Series C bonds issued by MIT are part of its strategic investments with a long time horizon. Barclays Capital led the financing for these bonds, helping MIT lock in a historically low cost of capital for a very lengthy period of time.
The MIT 2030 framework guides the physical development and renewal of MIT's campus and its surrounding innovation district. The bond financing is a type of long-term borrowing used for long-lived infrastructure assets. The ratings for MIT's Series C bonds are supported by the Institute's status as a pre-eminent research institution with exceptional student demand and a record of strong financial stewardship.
In conclusion, the Series C Taxable Bonds issued by MIT in 2021 are a significant step towards financing the Institute's ambitious plans for campus renewal and development, as well as its strategic research initiatives within the MIT 2030 framework. These bonds will provide the necessary funds to support MIT's long-term academic and research mission, ensuring the Institute's continued growth and innovation for decades to come.
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