Lipscomb completes first-ever public bond offering
Deby Samuels |
On Feb. 24, Lipscomb University’s first public bond offering ever was oversold by more than 4.69 times in roughly two hours, far surpassing the expected $63 million total.
The sale culminated more than 18 months of preparation by the university and its board’s finance committee to gain an investment-grade rating, which was granted in January at the BBB level. The Wednesday event resulted in a competitive biding process, which will reduce the university’s interest rates on the issue, saving the university millions in interest.
The offering was done to improve the institution’s debt structure, a common practice among growing organizations of the university’s size. Due to market conditions, including lower interest rates, the timing was very favorable.
“While the specific accounting and financial benefits are many as a result of the offering, the most important message is that a lot of large institutional investors, many of whom had never heard of us until that day, took a look at our numbers and our story as a boldly Christian institution and decided Lipscomb presented a strong investment opportunity for millions of their dollars. God blessed us in a way that will have very long-term impact,” said Lipscomb President L. Randolph Lowry.
The university is presently on track to invest $250 million in its programs and facilities by the year 2020, representing the largest-single financial goal ever set for the institution.
“We have bold plans for our students,” said Danny Taylor, senior vice president for finance and administration. “The success of this offering not only will make those plans much more reachable, but it clearly told us that we are being closely watched and admired and that some very ‘tough customers’ have a tremendous level of confidence that we will do what we say we will do and that we have a long and bright future.”
The issue will be finalized in the next few weeks. There are no plans for additional public bond issues in the immediate future.