(Bloomberg) — The University of California knows it faces significant repercussions from the coronavirus pandemic — though it can’t say how extensive. Yet it didn’t have any trouble borrowing money from Wall Street.
The system sold $2.3 billion in revenue bonds Thursday, its first sale since California, dealing with its own shortfalls triggered by the crisis, slashed the university’s funding by 12% in the fiscal year that started in July. The cuts could be reversed if additional federal dollars come through, a scenario that remains uncertain.
The offering of bonds with a final maturity of 2050 shows the dichotomy that’s emerging in the $3.9 trillion municipal market that finances states, cities, schools and other local institutions. While the virus has led to plummeting tax revenue and skyrocketing costs, some issuers are better equipped to manage the turbulence. And when it comes to colleges and universities, investors are weighing which are