University Of California Revives Muni Deal With $2B Sale

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00:00So, Maxwell, you know, Governor Governor Gavin Newsom, you know, put the university under fire

00:06for shelving this project, but it's back now on. So what happened in the meantime?

00:11So it wasn't that Newsom was angry at the university. He was just angry at institutions

00:17across the country that were complying with the Trump administration's demands. But ultimately,

00:23why this deal was shelved in August was because the UC was still contemplating how they were

00:28going to respond to the Trump administration. And any potential lawsuits that they might have

00:33filed could have complicated disclosure requirements in their bond offering.

00:38How are we expecting this bond offering to be received? Will there be appetite? I mean,

00:42unis have done phenomenally well this year. Yeah, usually there's strong appetite,

00:48like especially right now in California, there's going to be strong appetite from very wealthy

00:54investors who are looking to harvest some of their tax gains that they had in the equity sector.

01:02So we expect ample demand, as there usually is for these University of California deals.

01:06Now, is the university under pressure to come up with funding? You know, has there been a freeze

01:12around funding? Was this part of the attack on higher education, if I can put it that way?

01:17So most of the nearly $700 million in federal research funding that was frozen by the Trump

01:25administration has been restored. There's still about $27 million in grants that haven't been

01:31restored yet. So the UC is on pretty good financial footing at this point. They also just

01:38implemented a tuition raise during their latest Board of Regents meeting. And the university has the

01:45ability to do that without legislative approval, which does give them a lot of flexibility in their

01:49finances. Well, that's the danger, right? I mean, some of this is going to fall on students,

01:53although I imagine inflation has something to do with this as well. Are other universities now sort

01:59of given the green light to go to market? Yes. And you could expect that there'll be like more

02:06higher education deals coming out of the state of California. And rated pretty highly, as I understand

02:11at Maxwell. So no danger here? No, these bonds are usually pretty safe. The University of California

02:19is a historically very strong institution. It's one of the highest rated public universities in the

02:24country. And it's in the middle of Los Angeles, right in Westwood. It's still very appealing to

02:30students in the state of California. And they also have a lot of out of state students.