Trinity Issues New Bonds to Finance Capital Improvements and Refinance Debt

Alex Gervais ’28

Exec. Opinion and Design Editor

In a Jan. 20 email to the school, President Lugo announced that Trinity has authorized a new bond issuance to finance capital intensive improvement projects across campus. The College issued $13 million in Series T bonds after approval from the Connecticut Health and Educational Facilities Authority at a Dec. 10 meeting. The school was approved for a total of $42 million in bonds, issuing their $13 million in series T bonds to do campus facilities improvements and $26 million in other bonds to refinance a $21 million dollar debt set to be due in late April, spreading out payment costs over a longer period. These series T bonds are the first Trinity has issued since 2020, when they issued $51.6 million in bonds, as a response to financial headwinds in the wake of COVID market disruptions. 

Bonds are a financial asset used by institutions, companies, municipalities and other large groups to raise revenue. They’re a loan made by investors to an institution, the original value of this loan being the principal. Bonds earn interest over the course of their term based on the coupon rate, and then are paid back in full to investors at the maturity date. In higher education, bonds are tax-exempt and are often used when entering into capital intensive projects or when a school is seeking more immediate liquidity. Trinity’s bonds are rated as an A+ by Standard and Poor (S&P), which is considered an upper medium grade bond by credit assessors. The highest bond grade, also known as prime bonds, are rated AAA, a distinction Trinity is currently three grades away from. Trinity has a similar bond rating to its peers in the NESCAC: Wesleyan has an AA rating, Amherst an AA+ and Bates an A+. Evaluation of Trinity’s bond rating by creditors is based on a myriad of factors, including an anticipation of enrollment stability and the financial performance of the College. Trinity’s bond rating remained stable at A+ when assessed by S&P in late December even as other small, tuition based schools have seen their bond ratings decline since 2020. 

The Tripod sat down with Trinity’s Vice President and Chief Financial Officer, Scott Jordan, to discuss the bonds. Jordan framed the bond sales as a projection of strength for the College. Trinity’s bonds were “popular” according to Jordan, receiving $225 million in orders for the $40.5 million Trinity was seeking. This allowed the College to lower its interest rate, making it cheaper for Trinity to pay out interest over the bonds’s term, and allowed the College to sell more bonds, freeing up more capital for campus improvements. Jordan credited the College’s institutional reputation and “solid financials” as driving factors behind the school’s strong performance when going to market; as well as underscoring the faith investors and creditors have in Trinity’s leadership team. 

While exact outlays of where revenue will be directed are still being discussed by the Board of Trustees and the College’s leadership team, Jordan emphasized that the “guiding principles [of the bond sales] have been on improving the student experience.” He underscored that administration “want[s] Trinity to look great and to have… dorms that are comfortable and facilities that meet [student] needs.” “We also want to get started right away,” said Jordan, “we’re teeing up projects that we can start right away this summer.”