The University has issued $795 million in new bonds in part to construct a new residence hall and renovate Thurston Hall, officials announced Monday.
The majority of the new bond – about $521 million – will go toward refinancing the University’s roughly $1.5 billion debt. The bond will also enable $150 million in new spending on unspecified “academic priorities” and $100 million to build a new residence hall and complete “major renovations” of Thurston Hall, according to a release.
Both the new residence hall and Thurston Hall renovation project have not been previously announced. The release does not include details about the location for the new residence hall or the timetable for either project.
Officials have acknowledged since 2011 that Thurston – GW’s oldest and largest residence hall – is in need of an overhaul. Outside consultants have assessed the feasibility of Thurston renovations over the last year.
“We are committed to enhancing the student experience, and the funds from this bond issue will allow us to have a direct, positive impact on a critical piece of that experience: our residence halls,” University President Thomas LeBlanc said in the release.
The University issued the bond last month and Moody’s, a financial agency, approved GW’s A1 rating, the second highest rating available. The new bond, which enables the University to receive new funding in exchange for a vow to pay back investors with interest, will add $250 million to GW’s debt, according to the release.
Lou Katz, the executive vice president and treasurer, said refinancing the debt will allow the University to pay off debts over a longer period of time at a lower interest rate. The Board of Trustees also approved the new bond as a “prudent” financial move, according to the release.
“Given the recent rise in short-term interest rates and the relative stability of long-term interest rates, this is an exceptional opportunity to refinance debt,” Katz said in the release.
Officials anticipate that the University’s real estate investments and “revenue associated with GW’s residential life system” will negate the increase to the debt.
Last fall, the University paid off more than $150 million in bonds to begin paying down its rising debt. The University’s debt has steadily increased in recent years reaching more than $1.7 billion in 2016. Creditors expressed concern about the debt load last year when assessing the University’s overall financial outlook.