Concordia has sold $200 million in bonds to finance its ambitious construction
It is the first bond issue by a university in Quebec and only the fifth
in Canada. However, this is a growing trend, as Canadian universities
look to the private sector to supplement the financial support given by
The first to do so was the University of Toronto in 2001, with an offering
of $160 million. They were followed by the University of British Columbia,
York and Brock. At least six more offerings by Canadian universities are
expected, including McGill and another offering by U of T. However, Concordias
offering is the largest to date by a Canadian university.
The university was assigned a credit rating of A1 from Moodys Investors
Services and A from Dominion Bond Rating Service, the same ratings given
to the province of Quebec. This attests to the sound financial management
of the university as well as its positive outlook for the future.
Concordias offering was of Series A debentures, with interest of
6.55 per cent paid semi-annually; the minimum subscription was $150,000.
The bonds were sold to 23 purchasers, mainly pension funds.
These bonds are distinct from the grant bonds used by the
Quebec government since 1969 to finance capital spending in education,
health and the social services. Those bonds are managed, administered
and serviced by the government of Quebec. In this case, however, the bonds
are direct obligations of the university.
Concordia is in the midst of an extraordinary construction period (See
Buildings, page 2). The estimated cost of the three new buildings will
be about $351 million, of which $200 million will come from the bonds,
$100 million from private fundraising and the rest from government.