Treasurer Kennedy: "This is an unwelcome development in Louisiana's higher education funding crisis"

BATON ROUGE, LA – National investors this morning pulled out of a large portion of a $114 million bond deal for Louisiana State University amid concerns over budget instability and state support for LSU and other Louisiana colleges and universities, State Treasurer John Kennedy announced Friday.

“We’re trying to sort out the facts. This is obviously not a welcome development,” said Treasurer Kennedy. “It could have ramifications for other universities in Louisiana and for the state’s overall bond rating, and it could impact the interest rate on future state bond issues, including an upcoming $300 million state general obligation bond issue.”

LSU on Tuesday issued $114 million in revenue and refunding bonds to generate money and to save taxpayer dollars. Proceeds from the bond sale would have funded a Family Housing Complex, residence halls and a Student Health Center and also would have saved interest on existing debt. The bonds were priced on Tuesday.

Earlier this week, Moody’s Investors Services lowered LSU’s credit outlook from positive to stable because of limited prospects for sustained revenue growth. Moody’s action puts LSU one step away from a negative outlook, which could result in a downgrade for the university’s credit rating.

“Higher education in Louisiana has been socked with back-to-back years of reduced funding,” said Treasurer Kennedy. “Investors are sounding the alarm bell. We need to listen.”

Contact:
Michelle Millhollon
(225) 342-0012
mmillhollon@treasury.state.la.us