July 8, 2014 / 9:51 PM / 3 years ago

Illinois agency OKs $700 mln bonds for University of Chicago

CHICAGO, July 8 (Reuters) - The Illinois Finance Authority on Tuesday approved the sale of up to $700 million of tax-exempt revenue bonds for the University of Chicago.

Proceeds from bond sale will be used for capital projects including new student housing and to refund bonds the university sold in 2008. The bonds are expected to be priced in early August, according to the university’s financial advisor Prager & Co. The lead underwriter for the deal is Barclays Capital.

The authority also gave initial approval to a plan to issue $15 million of bonds for Midwestern University Foundation for a low-interest student loan program. The nonprofit, private institution would lend the proceeds to students at its suburban Chicago campus.

Normally, bonds sold to finance student loans are subject to federal taxation. The Midwestern University bonds would be tax free due to the authority’s allocation of so-called volume cap, which is distributed by the U.S. government to states to enable a limited amount of municipal bonds to be issued for private businesses or purposes on a tax-exempt basis.

Reporting By Karen Pierog; Editing by Cynthia Osterman

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