Northeast universities find bond investors in a rocky sector
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Higher education institutions are facing pressure from demographics, the federal government, and heightened competition — especially in the Northeast.
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But universities with the resources to support it are still accessing the market, even in April’s challenging market conditions.
Adelphi University priced a $100 million deal, incurring enough debt to warrant a downgrade; Quinnipiac University priced $180 million; and the University of Massachusetts moved up a $560 million refunding deal by two weeks based on market conditions. The schools’ willingness to borrow shows optimism that they can succeed despite the headwinds for their sector — and they found investors who agreed.
“Trends in the Mid-Atlantic and Northeast have been tough. And [Quinnipiac and UMass] are two schools that are doing well,” Moody’s analyst Susan Shaffer said. “It is nice to see some places that buck the trends.”
The University of Massachusetts deal, originally scheduled for May 5, priced on Thursday. Christopher Dunn, executive director of the University of Massachusetts Building Authority, said the deal was moved up based on the market upheaval.
The Series 2026-1, $250.3 million of bonds, refunded bonds from 2014 and 2015; maturities ranged from November 2026 through 2044. The Series 2026-2, $308.6 million, refunded a series of Build America Bonds from 2010, with maturities from 2026 through 2040.
The deal saw yields ranging from 2.5% for the 2026 maturities to 3.8% for the 2044 bonds.
Morgan Stanley was the deal’s senior manager, with Jefferies as co-senior manager and three co-managers. Omnicap Group was the financial advisor and Mintz was counsel. The bonds were rated Aa2 by Moody’s Ratings, AA-minus by S&P Global Ratings, and AA by Fitch Ratings.
Quinnipiac University issued $180.495 million of revenue bonds through the Connecticut Health and Educational Facilities Authority on Wednesday. The bonds will mature from 2027 to 2045.
Barclays was the manager, with BofA Securities, Morgan Stanley, and Ramirez & Co as co-managers. PFM was the deal’s municipal advisor, and Hinckley Allen was counsel. The bonds were rated A3 with a positive outlook by Moody’s and A-minus with a stable outlook by S&P.
Yields for the deal ranged from 2.56% in 2027 to 4.15% in 2045.
The Long Island-based Adelphi issued its $106.12 million deal on April 8 through the Town of Hempstead Local Development Corporation. The Series 2026A, $52.7 million, supports the university’s capital renovations. The Series 2026B, $53.4 million, refunded bonds from 2013 and 2014.
Hilltop Securities was the manager for the deal, with Nixon Peabody as counsel.
Ahead of the deal, S&P Global Ratings cut the university’s rating to BBB-plus from A-minus, a downgrade “driven by the university’s slim balance-sheet metrics that are expected to weaken with the approximately $54 million in series 2026 new money debt,” according to the rating agency.
“We expect demographic pressure will likely continue, with fewer projected graduating high school students in the state and surrounding area, which could make enrollment growth challenging,” the rating agency said.
Enrollment for the fall of 2025 totaled 7,386, according to the official statement for the deal, down from 7,584 five years earlier.
To “counter several years of declining graduate enrollment,” as the university described it in the OS, it is launching a graduate and professional center in Manhattan as its fourth campus this fall.
“The university secured an attractive lease by taking advantage of the favorable Manhattan real estate market,” the OS says.
Adelphi’s deal was 4.3 times oversubscribed, according to Michael Rhattigan, the school’s vice president of finance. The refunding generated $3 million of savings, Rhattigan said.
The higher education sector is facing many pressures, but the impact has been bifurcated, according to Moody’s analyst Patrick Ronk. Elite private schools and large public universities are doing fairly well, because their identifiable brands give them pricing power. Smaller schools, especially liberal arts institutions, are struggling.
Schools in New England and the Mid-Atlantic have been hit especially hard, because the region has overall poorer population growth and a stark oversupply of colleges and universities, according to Shaffer.
UMass and Quinnipiac are in the category that hasn’t struggled with enrollment.
Quinnipiac University
UMass has 50,700 full-time enrolled undergraduate students and 14,000 graduate students, figures that have held steady over the past five years; the number of applicants has grown from 80,000 thousand in 2021 to 100,000 in 2025. Quinnipiac has 9,700 full-time undergraduate and graduate students, and is “on track to reach 10,000,” Moody’s analyst Samuel Berzok said.
UMass seems to be situated in line with student demand trends, Ronk said, offering a solid but affordable education. UMass also gets considerable support from Massachusetts, Ronk said, allowing it to operate campuses in economically important regions and offer degrees that meet the commonwealth’s workforce needs.
“The commonwealth provides very good both operating and capital support for them, and that really helps … give them financial flexibility to invest in new programs, invest in capital facilities, and kind of keep the overall brand and program offerings very strong,” Ronk said.
Flagship public universities with large name brands have struggled, too.
Quinnipiac, based in Hamden, Connecticut, is a “strong operator,” Berzok said, but there’s not a single, identifiable reason why it’s performing so much better than many other private New England universities.
“There’s been a period of capital investment happening at QU for the past couple years, and with a particular focus around student life and broadening their academic program mix — the launch of a nursing program, for example,” Berzok said. “Those investments have increased their leverage overall, but to a manageable degree, and it’s been yielding some good results on the enrollment side.”
Winning the national hockey championship in 2023 probably also helped with the university’s brand, Berzok said.
“It isn’t always completely explainable why Quinnipiac is doing so well,” Shaffer said, “relative to other schools that, on paper, look sort of similar, or maybe are smaller, that are having such struggles. But, sometimes a school, just — there’s something in the air, there’s something that they’re doing that students find really appealing.”
Adelphi University doesn’t have the balance sheet strength of Quinnipiac, but Rhattigan said the school has performed better than many similar-sized schools in the Northeast.
One of Adelphi’s strongest selling points, Rhattigan said, is that its students have stronger academic performance and higher salaries post-graduation compared to students at peer schools.
The university uses this data to make a case to prospective students, but it also proved persuasive to investors, Rhattigan said.
“We’re all aware,” Rhattigan said, “of the challenges and uncertainty ahead, whether it’s overall [falling] demand in higher education, or it’s uncertainty over funding, regulatory changes, etc. So we’ve, I think, done a very good job of trying to navigate that and adjust, and you can see some of the steps we’ve taken in trying to align our costs with the revenue and position for the future accordingly.”
