CSU System sells $239M in bonds for new football stadium

The Colorado State University System has secured more than $239 million in financing from investors for construction of a new football stadium on the southwest edge of CSU’s main campus in Fort Collins, according to a media release issued Monday by CSU.

Bonds for the new stadium sold in less than 90 minutes on Thursday, according to the university. The total bond package delivered a true interest rate of 3.57 percent, it said.

Of the $239 million in bonds, $220 million is for construction funds and the remainder consists of capitalized interest to support payments on the bonds while the facility is constructed and revenues from its operations are not yet available. The university plans to break ground on the stadium this summer and have it ready for the 2017 football season. Games currently are played at aging Hughes Stadium, two miles west of the main campus.

SPONSORED CONTENT

Empowering communities

Rocky Mountain Health Plans (RMHP), part of the UnitedHealthcare family, has pledged its commitment to uplift these communities through substantial investments in organizations addressing the distinct needs of our communities.

CSU’s appointed Board of Governors had voted 8-1 on Feb. 5 – with only its treasurer and lone Fort Collins resident dissenting – to approve the sale of $242 million in bonds over 40 years to build the 36,000-seat football stadium. That vote came slightly more than a week after the Colorado Legislature’s joint Capital Development Committee voted 5-1 – also with only its lone member from Fort Collins dissenting – to authorize CSU’s stadium-financing plan. Last week, the Fort Collins City Council voted 4-3 to enter into an intergovernmental agreement with the school to assign responsibility for off-campus, stadium-related infrastructure and impacts from construction and operation of the stadium.

In recent weeks, both Standard and Poor’s Rating Service and Moody’s Investor’s Service maintained the system’s underlying bond ratings. Moody’s upheld the system’s “Aa3” rating, and S&P continued its “A+” rating for CSU System debt. CSU also maintained an S&P rating of “AA-“ and a Moody’s rating of “Aa2” for bonds issued with the backing of the Colorado State Intercept Program, which was not used for the stadium project.

However, Standard & Poor’s revised CSU’s credit outlook to “negative” from stable, warning that borrowing could “exert greater pressure on financial resources.” Both ratings firms cautioned that CSU faces a bond-rating downgrade in the future if it fails to meet certain financial objectives.

Later this year, CSU plans to issue an additional round of bonds totaling approximately $160 million for construction of a new medical center, a biology building, a parking structure, a parking lot and relocation of the Plant Environmental Research Center.