(Bloomberg) -- Cornell University is poised to tap investors for more than $1 billion this month, the latest in a boomlet of elite universities selling debt to raise money for new projects on campus.

The school, based in Ithaca, New York, plans to borrow as much as $500 million of taxable bonds set to price April 4, followed by $610 million of tax-exempt bonds the following week, according to preliminary offering documents. 

The tax-exempt portion of the sale will finance buildings, classroom facilities, maintenance and other infrastructure on the school’s main campus upstate, while also raising funds for student housing facilities at the Weill Cornell Medicine campus in New York City. The medical school is constructing a new student residence that will expand the scope of the institution’s Upper East Side campus and nearly double the existing student residential living space when it opens in 2025.

The planned sale makes Cornell the latest elite college to tap the bond markets for funds, taking advantage of a lower interest-rate environment compared to where borrowing costs held for much of 2023. Earlier this year, Princeton University sold nearly $1.5 billion of debt and Harvard University sold $750 million of taxable bonds, with plans to tap the tax-exempt market next week, according to data compiled by Bloomberg. 

“Tax-exempt rates are low, and then you also have the spring time where you have to line up financing for construction projects for the summer,” said Dora Lee, director of research at Belle Haven Investments. “When rates were high there were issuers on the sidelines, but it seems that we’re at the end of that waiting period.” 

Cornell University representatives didn’t respond to a request for comment.

Proceeds from the deal will also partially refinance some of the university’s $2.3 billion of outstanding debt, which includes $407.7 million in operating leases. Last November, luxury real estate giant Sotheby’s leased five floors of its 500,000-square-foot headquarters on York Avenue to Weill Cornell Medicine, which will devote the space to computational and chemical research.

Unlike some schools which are struggling to lure students to campus, Cornell boasts “exceptional demand flexibility and student quality,” according to S&P Global Ratings credit analyst Laura Kuffler-Macdonald in a ratings report. The school received more than 67,800 applicants for admission for the class that started in the fall, of which roughly 5,300 were accepted. 

The school’s strong demand and sterling finances — Cornell has a $9.6 billion endowment — helped it score a AA credit rating from S&P. That grade should help boost appetite for the debt, said Daniel Solender, head of municipals at Lord, Abbett & Co. 

“Cornell is a very high quality credit that provides diversification that doesn’t come to the market as often, so it should find good demand,” he said.

Bank of America Corp. and Goldman Sachs & Co., the two banks underwriting the deals, both declined to comment.

Municipal bond sales leaped about a third to nearly $100 billion during the first quarter, as issuers seize on lower interest rates and a calm ahead of the 2024 presidential election and uncertainty around Federal Reserve cuts.

--With assistance from Janet Lorin.

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