USM Refinances Combined $153 Million in Outstanding Bonds, Saves Maryland Taxpayers More Than $17.1 Million

Deal Reflects System’s Continued Strong Financial Ratings in Higher Education Sector Nationally

Baltimore, Md. (Feb. 15, 2021) – Maryland taxpayers will save more than $17.1 million from the University System of Maryland’s (USM) successful and recent refinancing of previously issued public bonds.

On Feb. 11, the USM closed the refinancing of $153.2 million of previously issued revenue bonds as part of a nationwide financial auction that attracted as many as a dozen bidders. The final transaction resulted in a net savings of $17,173,548, or 11.4 percent of the bonds refinanced.

The system sold $237,285,000 of face-value Series A tax-exempt bonds, with an interest rate of 2.06%. The actual money received was $295,707,271. The difference of $58,422,271 is money that the USM now will use toward ongoing and future project spending.

Agencies overseeing the refinancing process noted the importance of the USM’s solid bond ratings to the final outcome. 

Earlier this month, the system received a rating of Aa1 from Moody’s Investor Services and ratings of AA+ from Standard and Poor’s and Fitch Investor Services.

All three ratings agencies reaffirmed the USM financial outlook as “stable” at a time the broader higher education sector is experiencing a negative outlook.

Each rating was only one level down from the highest possible grade of AAA. The system’s high ratings are due in part to analysts’ confidence in the quality of leadership and financial management across the USM.

Strong ratings issued by the nation’s three primary bond-rating agencies are an important measure of a university system’s financial strength and stability, and the consistency of USM ratings during the past decade and beyond is noteworthy. The USM Aa1 rating with Moody’s has held constant since September 2010, and the system received its AA+ rating from Fitch in December 2010 and has maintained that rating since. The USM has earned the same AA+ rating with Standard and Poor’s since 2008.

Strong bond ratings also translate into practical financial advantages for the USM, its students and Maryland taxpayers: they allow USM to borrow money and refinance debt at lower interest rates; and help the system leverage the best partnership opportunities in future financial transactions.

“We’re obviously delighted with these results—our continued strong bond ratings and, ultimately, what they mean for our institutions, our students and employees, and, most of all, Maryland’s taxpayers,” said USM Chancellor Jay A. Perman. “This successful refinancing shows the power and stability of our system and the sound financial management of our institutions. And that, in turn, is an endorsement of our university presidents and their leadership teams.”

Ellen Herbst, USM’s vice chancellor for finance and administration, said the overall success of this relatively larger bond offering has much to do with the USM’s outstanding credit, which led to high demand and optimal savings. “These results demonstrate the outstanding direction our presidents and system leadership provide every day in making decisions that result in strong, sustainable results,” Herbst said.

The USM comprises 12 institutions: Bowie State University; Coppin State University; Frostburg State University; Salisbury University; Towson University; the University of Baltimore; the University of Maryland, Baltimore; the University of Maryland, Baltimore County; the University of Maryland Center for Environmental Science; the University of Maryland, College Park; the University of Maryland Eastern Shore; and the University of Maryland Global Campus. The USM also includes three regional centers—the Universities at Shady Grove, the University System of Maryland at Hagerstown, and the University System of Maryland at Southern Maryland—at which USM universities offer upper-division undergraduate and graduate courses.

Systemwide, student enrollment exceeds 172,000. The USM and its institutions compete successfully nearly $1.5 billion in external grants and contracts annually. USM institutions and programs are among the nation's best in quality and value according to several national rankings. To learn more about the University System of Maryland, visit


Contact: Mike Lurie
Phone: 301.445.2719