Harvard returns to market with a $675 million bond sale

Harvard University is set to price $675 million of revenue bonds amid continued pressure from the Trump administration.

The Ivy League university was one of many elite schools from which the administration has threatened to withhold funds.

Last spring, attacks from the administration caused spreads on Harvard's debt to cheapen on the secondary market, but it recovered by the end of the year.

Harvard's bonds are rated Aaa by Moody's Ratings and AAA by S&P Global Ratings.

The negotiated deal consists of $675 million of unsecured general obligation revenue bonds, which will be issued through the Massachusetts Development Finance Agency.

The bonds will fund construction and renovation of several teaching, research and administrative buildings on Harvard's campuses. Proceeds from the bonds will be used to refund the university's 2016 bonds and repay a portion of its outstanding commercial paper.

Goldman Sachs (GS) and Morgan Stanley (MS) are the lead managers for the deal, with ten co-managers. Hinckley Allen is the bond counsel.

Harvard issued nearly $1.2 billion of bonds last year; the school has $8.3 billion of bonds and notes outstanding.

Elite universities have been issuing bonds more often since the Trump administration began threatening to withhold their federal funds last year. Harvard in particular has drawn the ire of the administration.

The Department of Justice sued Harvard earlier this month, alleging Title VI violations based on antisemitism. The lawsuit seeks a release from the government's requirement to pay grants to Harvard and would enjoin the university from entering into some future federal contracts, according to disclosure in the official statement.

That lawsuit is just the most recent of many federal threats against the university.

In April of 2025, the Trump administration tried to halt $2.2 billion of research reimbursements, the school disclosed in the offering statement for the bonds. A court ruled in Harvard's favor, but the government has appealed. In May, the administration sought to revoke Harvard's certification to sponsor visas for international students.

"The government has also appealed a further injunction Harvard obtained against a presidential proclamation that would have suspended the entry of new international students attending Harvard," according to the offering statement.

The Department of Education "imposed heightened cash monitoring requirements" on the university in September, "requiring it to make disbursements of aid to eligible students and parents, and to pay any credit balances, before requesting or receiving funds from the Department," according to the offering statement.

"While the outcome and consequences, if any, are not determinable at present, no such lawsuits or proceedings are pending or threatened that, in management's opinion, would be likely to have a material adverse effect on the university's ability to meet its commitments related to the bonds," the university wrote in the offering statement.

Harvard has also been affected by a number of federal policies, such as raising the top endowment tax rate from 1.4% to 8%, ending certain student loan programs, and restricting international students and faculty.

Harvard wrote that the federal government's past and future actions could directly or indirectly reduce fundraising revenue, increase taxes or other costs borne by the university, adversely affect its status as a 501(c)(3) entity, or otherwise damage its reputation or business.

The school's immense financial resources and exclusivity were highlighted in an investor presentation about the deal. Harvard College admitted only 4.2% of applicants last year, the presentation said, adding that it had a $56.9 billion endowment and $68.7 billion of net assets.