Harvard Eyes $675M Bond Sale as Financial Pressures Grow

Harvard will attempt to issue $675 million in tax-exempt bonds — its third major debt sale in just over a year — according to a preliminary official statement released Friday.

The bond sale comes as Harvard faces a turbulent financial landscape and mounting financial pressure from the federal government. The University reported an operating loss of $113 million last year — its first budget deficit since the pandemic — a 1.7 percent operating shortfall on $6.7 billion in total revenue and a sharp reversal from the previous year’s $45 million surplus.

The preliminary statement acknowledges the Trump administration’s decision to halt billions in research funding, as well as an increased endowment tax projected to cost the University roughly $200 million annually.

“While the financial impact on the University resulting from the totality of potential developments at the federal level cannot be quantified at this time, any such developments may, directly or indirectly, have a material adverse effect on the current and future financial profile and operating performance of the University,” the statement reads.

The University also flagged “Litigation, Investigations, and Other Proceedings,” citing ongoing lawsuits that may result in “substantial claims, judgments, and settlements,” while maintaining that none pose a threat to its ability to meet its bond commitments.

Harvard spokesperson Jason A. Newton said roughly $600 million of the issuance will refinance existing debt to reduce costs, while about $150 million will replace bonds nearing maturity. Because most of the proceeds will be used to retire current liabilities, the transaction is expected to be largely cash-neutral.

“We had $8.3 billion of University debt at the end of fiscal year 2025, and we do not anticipate a material change in total debt as a result of the proposed bond issuance,” Newton wrote.

The sale comes more than a week after the Department of Justice’s latest lawsuit against Harvard, alleging the University violated federal civil rights law by failing to protect Jewish and Israeli students from harassment on campus. The lawsuit seeks injunctive relief and the recovery of federal funds under Title VI of the Civil Rights Act.

That case is one of several ongoing disputes between Harvard and the federal government. In April 2025, the administration moved to halt $2.2 billion in multi-year research grants, prompting Harvard to sue and later secure a favorable ruling restoring funding, though the government has appealed that decision.

Harvard also sued after the Department of Homeland Security revoked its certification to sponsor international students in May 2025 and President Donald Trump issued a proclamation the following month barring Harvard visa holders from entering the country. A federal judge blocked both actions, but the government has appealed those rulings to the First Circuit.

In February, the Justice Department filed a separate lawsuit seeking to compel Harvard to turn over applicant-level admissions data as part of a civil rights compliance review. The Department of Education has also launched two new investigations into the University’s admissions practices and its handling of antisemitism complaints this month.

Harvard tapped the debt markets twice last spring — issuing $450 million in tax-exempt bonds in March 2025 and $750 million in taxable bonds the following month, bringing that fiscal year’s total to $1.2 billion.

The April 2025 sale drew immediate scrutiny. Rep. Elise M. Stefanik ’06 (R-N.Y.) urged the Securities and Exchange Commission in June to investigate the offering, alleging Harvard failed to disclose its decision to reject federal demands to investors before issuing the bonds. The Department of Education also placed Harvard on heightened cash monitoring status shortly after.

The University wrote in the filing that proceeds would fund real estate development in Allston and a new economics building to be named Pritzker Hall. An internal Alumni Affairs & Development presentation obtained by The Crimson wrote that the building faced a $37 million funding gap at the end of 2025, with construction already underway.

The Allston developments are part of Harvard’s ten-year Institutional Master Plan, which includes six major institutional projects as of 2024.

Both Moody’s and S&P reaffirmed Harvard’s AAA credit rating — the highest possible — with a stable outlook. The document states that Harvard is committed to supporting repayment of the debt.

—Staff writer Megan L. Blonigen can be reached at [email protected]. Follow her on X at @MeganBlonigen.

—Staff writer Graham W. Lee can be reached at [email protected]. Follow him on X @grahamwonlee.