(December 9, 2021) – Grand Canyon University (GCU) successfully closed a $ 1.2 billion bond offering to refinance the remaining balance of the guaranteed note issued in 2018 as part of the purchase of University as part of its transition to 501 (c) (3) tax-exempt nonprofit status and additional loans made to acquire fixed assets after the transaction closes.
The initial interest-only note, which was due in 2025, allowed GCU to purchase all of the tangible and intangible assets that make up the University’s campus at Grand Canyon Education (GCE). Refinancing the note early allows GCU to take advantage of today’s lower interest rates and achieve substantial savings on interest charges.
“The scope of this refinancing is quite significant in the higher education bond market and is a testament to GCU’s strong financial performance over the three years since its return to our historic nonprofit status,” president of GCU. Brian mueller noted. “This will help us in our efforts to continue to freeze tuition fees on campus, which we have done for 14 consecutive years, while continuing to invest in academic infrastructure in order to keep up with the growth of the University.”
GCU’s financial model has enabled it to invest $ 1.6 billion in university infrastructure over the past decade without relying on state taxpayer grants or passing those costs on to students with fee increases. tuition at its Phoenix campus. GCU’s 270-acre campus was ranked # 7 in the country by niche.com. Affordable tuition fees have also resulted in graduates taking on less debt than the public university average, with student loan default rates well below the national average.
Jean Augustin, who heads the higher education and academic medical center sectors in the U.S. municipal finance team at Barclays, said the offer has garnered considerable interest from nearly 30 investors , including large insurance companies, bond funds and investment managers. Barclays was the sole book manager on the offering.
âGrand Canyon University’s mission to make private Christian education affordable and accessible to top performing students, regardless of their economic status, has been well received by investors,â said Augustine. “The University now joins a very select group of public and not-for-profit universities that have successfully entered into a bond offering of this magnitude.”
Chairman of the GCU Board of Directors Gonzalez said the bond offering is an important milestone for the University.
âAs a former GCU and Chairman of the Board, I could not be more proud of how far the University has come to benefit not only our students and their families, but the surrounding community as well. This bond offering positions the University well for the future.
In the three years since GCU returned to its nonprofit status, audited financial results clearly show that the University is thriving:
- From the closing of the acquisition on July 1, 2018 until June 30, 2021, GCU generated $ 341 million in operating cash.
- GCU increased its net assets to $ 443 million as of June 30, 2021.
- GCU closed fiscal 2021 with more than $ 407 million in cash.
- From the closing of the acquisition on July 1, 2018 until June 30, 2021, the University has reinvested $ 368 million in new educational infrastructure.
The refinancing was arranged by Colliers CIMA Group in Phoenix, Arizona, led by the General Manager of the Southwest region Robert kline and Todd christmas, National Director of Education Services, who noted that the mix of GCU’s industry-leading higher education platform, as well as its significant real estate campus, made this funding extremely attractive to buyers of bonds and lenders.
âTo my knowledge, this is the largest real estate related financing in the state of Arizona and could not have been finalized without GCU’s innovative approach to higher education,â said said Kline. âDue to the size of the funding demand, the whole team has put in place this unique funding structure using the bond markets with more room to incorporate future tax-exempt and conventional funding to support the continued growth of GCU. “
GCU was represented in the bond offering by Ballard Spahr LLP.
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About Grand Canyon University: Grand Canyon University was founded in 1949 and is Arizona’s first private Christian university. GCU is regionally accredited by the Higher Learning Commission and offers nearly 300 academic programs, accents and certificates for traditional undergraduates and working professionals. The University’s curriculum emphasizes interaction with classmates, both in person and online, and the individual attention of instructors while merging academic rigor with Christian values ââto help students. students to find their purpose and to become competent and caring professionals. For more information, visit gcu.edu.