Importance Score: 72 / 100 🔴
Harvard Bonds Under Pressure Amid Government Standoff
Harvard University’s bonds, a component of the prestigious Ivy League institution’s $8.2 billion debt portfolio, faced challenges Friday amidst an increasingly tense dispute with the U.S. administration. The bond prices felt the impact as the university contested the government’s action concerning student visas.
University Challenges Federal Action
The university initiated legal action against the administration following Thursday’s decision to rescind its authorization to enroll international students, a significant source of revenue. This legal battle adds further complexity to Harvard’s financial landscape.
Bond Prices Decline Following Funding Concerns
Since March, Harvard’s bond values have experienced a noticeable decline. This downturn followed letters from the U.S. Education Department to 60 universities, including Harvard, cautioning them about potential reductions in federal funding unless they addressed allegations of antisemitism. The department’s scrutiny has introduced uncertainty into the university’s financial outlook.
Specific Bond Performance
While the movements were moderate, Harvard’s 3.15% bond maturing in 2046 (US740816AM58=TE) decreased to nearly a record low of 66.5 cents on the dollar, representing approximately a one-third discount from its nominal value.
Government Accusations
The Secretary of Homeland Security accused the Boston-based university of “fostering violence, antisemitism, and coordinating with a foreign government.”
University’s Response
In a lawsuit submitted to a Boston federal court, Harvard characterized the revocation as a “patent violation” of the U.S. Constitution and other federal laws, asserting it had an “immediate and devastating effect” on the university and more than 7,000 visa holders.