Full Disclosure: I work for a very large Life Insurance company.
"Life insurance companies are pursuing wealthy private colleges as a lucrative growing market to lend money, the latest Wall Street sector where private debt is making inroads.
Princeton, Vanderbilt and Carnegie Mellon universities and the University of Rochester are among schools that have borrowed from insurance companies, according to public records and regulatory filings.
The life insurance deals mark a shift from the traditional way that schools borrow by issuing bonds, mostly tax-exempt. But the insurance companies can do the deals more quickly and easily, making them attractive for colleges to refinance debt, spruce up dorms and for new construction. Insurers have been building up lending in commercial real estate and private debt, seeking ways to find higher-returning investments as the 10-year Treasury yield hovers close to 1%.
Life insurers, which often heavily invest in bonds to match payouts to customers, are eager to put money to work at a time when conventional corporate and government debt pays little. And they have a healthy appetite for these college deals in their portfolios, according to Roger Goodman, a partner with the Boston-based Yuba Group, a financial adviser to universities and nonprofits.
“They are certainly pursuing making these loans more aggressively,” Goodman said. “They need to make fixed-income, high quality investments on a long-term basis and may not have been getting large allocations from public deals.” "
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"Vanderbilt borrowed $300 million in 2018 for refinancing and construction of its residential college system.
“We’ll certainly will be back in the public market at some point,” said Trey Beasley, assistant vice chancellor for Treasury. “It’s a way to source capital on a more direct basis.” "
Perhaps, Beasley should have added " . . . to help facilitate a series of major investments in support of our student-athletes."
https://www.bloomberg.com/news/arti...lt-wooed-by-life-insurance-companies-for-debt
"Life insurance companies are pursuing wealthy private colleges as a lucrative growing market to lend money, the latest Wall Street sector where private debt is making inroads.
Princeton, Vanderbilt and Carnegie Mellon universities and the University of Rochester are among schools that have borrowed from insurance companies, according to public records and regulatory filings.
The life insurance deals mark a shift from the traditional way that schools borrow by issuing bonds, mostly tax-exempt. But the insurance companies can do the deals more quickly and easily, making them attractive for colleges to refinance debt, spruce up dorms and for new construction. Insurers have been building up lending in commercial real estate and private debt, seeking ways to find higher-returning investments as the 10-year Treasury yield hovers close to 1%.
Life insurers, which often heavily invest in bonds to match payouts to customers, are eager to put money to work at a time when conventional corporate and government debt pays little. And they have a healthy appetite for these college deals in their portfolios, according to Roger Goodman, a partner with the Boston-based Yuba Group, a financial adviser to universities and nonprofits.
“They are certainly pursuing making these loans more aggressively,” Goodman said. “They need to make fixed-income, high quality investments on a long-term basis and may not have been getting large allocations from public deals.” "
______________________________________________________________________________
"Vanderbilt borrowed $300 million in 2018 for refinancing and construction of its residential college system.
“We’ll certainly will be back in the public market at some point,” said Trey Beasley, assistant vice chancellor for Treasury. “It’s a way to source capital on a more direct basis.” "
Perhaps, Beasley should have added " . . . to help facilitate a series of major investments in support of our student-athletes."
https://www.bloomberg.com/news/arti...lt-wooed-by-life-insurance-companies-for-debt
