Trent University Announces Groundbreaking Inaugural Debenture Offering
University receives "A" rating with a stable trend based on reputation and enrollment
In a trailblazing move for smaller universities, Trent University issued its first-ever debenture to investors to effectively refinance debt for considerable savings.
The University issued and priced by way of private placement, $71 million in senior unsecured A debentures to refinance existing debt and provide funds for capital projects. Trent University received an “A” (stable) rating from Dominion Bond Rating Service (DBRS) based on Trent’s “reputation as an important, primarily undergraduate and liberal arts institution” with increasing enrollment. The debenture offering was approved by the University’s Board of Governors at its February 3, 2017 meeting.
“The inaugural debenture offering is a sign of the strength of our Board’s financial stewardship. This is a groundbreaking move for smaller universities. It shows that we can, like larger universities, take advantage of the Canadian bond market and the financial advantages it provides without a discount,” said Dr. Leo Groarke, president and vice-chancellor of Trent University. “Trent’s “A” (stable) credit rating is a strong signal that Trent is performing well on the key measures that influence the market.”
The “A” (stable) rating and decision to issue debentures comes as Trent ranked as the number one undergraduate university in the province for the sixth year in a row, experienced two years of enrollment growth and leads the province for percentage increase in applications yet again for fall 2017.
The debentures will have a term of 40 years, with the following benefits:
- locks in a lower effective cost of capital; and
- eliminates interest rate and refinancing risk over the term
Trent University’s vice-president, Finance and Administration, who led the effort to arrange the inaugural offering, commented: “This is a sound way for the University to manage debt and finance capital projects. It’s a coming of age for Trent and provides much greater flexibility that will allow the institution to take advantage of the momentum we are gaining in enrollment and reputation.”
Refinancing the University’s debt will achieve cost savings through the replacement of current fixed amortizing loans with a non-amortizing debenture.
About Trent University
One of Canada's top universities, Trent University was founded on the ideal of interactive learning that's personal, purposeful and transformative. Consistently recognized nationally for leadership in teaching, research and student satisfaction, Trent attracts excellent students from across the country and around the world. Here, undergraduate and graduate students connect and collaborate with faculty, staff and their peers through diverse communities that span residential colleges, classrooms, disciplines, hands-on research, co-curricular and community-based activities. Across all disciplines, Trent brings critical, integrative thinking to life every day. Today, Trent's unique approach to personal development through supportive, collaborative community engagement is in more demand than ever. Students lead the way by co-creating experiences rooted in dialogue, diverse perspectives and collaboration. In a learning environment that builds life-long passion for inclusion, leadership and social change, Trent's students, alumni, faculty and staff are engaged global citizens who are catalysts in developing sustainable solutions to complex issues. Trent's Peterborough campus boasts award-winning architecture in a breathtaking natural setting on the banks of the Otonabee River, just 90 minutes from downtown Toronto, while Trent University Durham – Greater Toronto Area, delivers a distinct mix of programming in the east GTA.
Kate Weersink, media relations and strategic communications officer, Trent University 705-748-1011 ext. 6180 kateweersink@trentu.ca