The State Treasurer Friday morning reported that national investors pulled out of a large portion of a $114 million bond deal for LSU amid concerns over budget instability and state support for Louisiana colleges and universities.
“We’re trying to sort out the facts. This is obviously not a welcome development,” State Treasurer John Kennedy said Friday in a press release. “It could have ramifications for other universities in Louisiana and for the state’s overall bond rating, and it could impact the interest rate on future state bond issues, including an upcoming $300 million state general obligation bond issue.”
LSU on Tuesday issued $114 million in revenue and refunding bonds to generate money and to save taxpayer dollars. Proceeds from the bond sale would have funded a Family Housing Complex, residence halls and a Student Health Center and also would have saved interest on existing debt. The bonds were priced on Tuesday.
Earlier this week, Moody’s Investors Services lowered LSU’s credit outlook from positive to stable because of limited prospects for sustained revenue growth. Moody’s action puts LSU one step away from a negative outlook, which could result in a downgrade for the university’s credit rating.