Harvard To Borrow $480 Million To Fund Capital Projects, Refinance Debt

Harvard is borrowing $480 million to refinance its debt and to fund capital projects on campus, including the construction of a new Harvard Law School building, according to a credit rating report released Friday by Moody's Investors Service.

Despite the new bond issuance—which brings the University's total outstanding debt to $6.5 billion—Harvard will maintain its top-notch 'AAA' credit rating from both Moody's and Standard and Poor's, another credit rating service.

Harvard's Chief Financial Officer Daniel S. Shore had said last fall that Harvard would likely need to take on more debt this year, even if the University aimed to sustain only a "shrunken down" series of capital expenditures for the campus. But he added that the University would be careful in issuing more debt, and that it would prioritize the maintenance of its vaunted 'AAA' rating.

A Moody's credit rating report issued last April said that Harvard was considering halving its capital spending and new debt issuance, and the University recently announced that it would be halting construction of its Allston Science Complex, the roughly $1 billion cornerstone of the University's future campus across the Charles River.

The last time Harvard issued debt was in December 2008, at the height of the global financial crisis, when it borrowed $2.5 billion to raise cash, refinance risky short-term debt, and terminate certain investment agreements. The move drew heavy media attention and criticism, with a Forbes cover story suggesting that Harvard was in a "cash-raising panic."


Despite reining in its ambitious Allston expansion plans, Harvard has continued to push forward with other campus construction and renovation projects, including at the Harvard Art Museum and Arnold Arboretum. Law School administrators decided last year to continue construction of HLS' Northwest Corner Building, in spite of University-wide efforts to cut expenditures, because the project would have been more expensive to halt than to continue, according to Law Professor and then-Interim HLS Dean Howell E. Jackson in interviews last year. Administrators did make modest changes to the plan by deciding not to demolish buildings adjacent to the expansion.

The HLS building, scheduled to be completed by winter 2011, will house the school's rapidly growing clinical programs, a student center, and classrooms.

—Staff writer Elias J. Groll can be reached at

—Staff writer William N. White can be reached at