Princeton Scores Lower Bond Rate Than Harvard, Times Debt Market Perfectly

Jan. 13 (Bloomberg) -- Princeton University raised $1 billion in its first taxable bond sale since 1994 at lower rates than Harvard University paid a month ago.

The Princeton sale was split between 10-year 4.95 percent notes and 30-year 5.7 percent bonds, according to data compiled by Bloomberg. Both maturities yield 270 basis points more than Treasuries of similar maturity. On Dec. 5, Harvard sold 6 percent 10-year notes and 6.5 percent 30-year bonds at a so- called yield spread of 337.5 basis points for both issues. A basis point is 0.01 percentage point.

Princeton's lower rates reflect increased investor interest for debt securities other than government bonds after investment- grade issues tumbled 6.8 percent in 2008, the worst performance in at least 35 years. Harvard raised funds on the day that the average spread on investment-grade debt hit a record, according to Merrill Lynch & Co.

The school's decision to tap the debt markets today was "equal parts luck as well as skill," said Martin Fridson, the chief executive officer of New York-based Fridson Investment Advisors, who graduated from Harvard and Harvard Business School. His wife, Elaine Sisman, obtained her PhD at Princeton.

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Comments

[drymartini1]

test scores are just about the most fair and unbalanced means to evaluate students out there because everyone takes the same test.

gpa on the other hand depends on the school. some school grant A's en masse, some are very stingy. how do you evaluate a student across the country like that.

[TJCole]

Well New Jersey is not the same as Arkansas had I grown up in Arkansas, I too would have been a Rhodes Scholar...­!

As well as all my brothers and sisters..a­nd cousins...

[TJCole]

Maybe if they didn't discriminate so much against Italian Americans with the test scores and grade point average required to enter, they'd have a little more money..?