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June 12, 2020

Trinity College plans $51.6M debt refi, taps $10M credit line amid pandemic uncertainty

Photo | Contributed Hartford's Trinity College.

Trinity College, which has faced financial headwinds in recent months due to the coronavirus pandemic, plans to issue $51.6 million in bonds to refinance existing debt, according to an outline of the financial transaction.

The bonds will be issued by the Connecticut Health and Educational Facilities Authority (CHEFA), the state's self-funded, quasi-public agency that issues tax-exempt bonds on behalf of nonprofit institutions, a preliminary bond statement said.

The money will be used to refinance three different outstanding bond issues. The move comes at a time of historically low interest rates. Trinity College plans to issue the bonds through CHEFA sometime next week.

The bond deal comes as Trinity, like many U.S. colleges, is facing a host of financial challenges due to fallout from the COVID-19 pandemic, which forced the school to close its campus in March to prevent the spread of the disease. 

Trinity opted to refund $5.1 million in room and board payments, after it sent most on-campus students home. In April, Trinity drew its entire $10 million credit line as a "precautionary measure,"  the school reported. It also received $1.38 million through the federal CARES Act.

The college is projecting a loss of less than 1% of its operating revenue for fiscal 2020 -- which ends July 1 -- mostly due to the refunds, according to Trinity. Revenue from Trinity's operations in fiscal 2019 was just under $152 million. 

The preliminary bond statement also said the liberal arts college, which enrolled more than 2,100 students last fall, plans to reopen its Hartford campus beginning Sept. 1, as long as Trinity meets so-called "gating conditions" including a sustained lower transmission of COVID-19 in the community. 

"Assuming that all gating conditions are met, the College is expecting to begin on-campus learning after September 1, 2020, and conclude the fall, 2020 semester before Thanksgiving," the preliminary statement said.

That announcement comes as the University of Connecticut, University of Hartford and the Connecticut State Colleges and Universities system have also set plans to reopen their campuses to residential and commuter students for the fall semester.

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