University sells $70m in bonds for vaccine lab

by Daniel J. Fitzgibbons, Chronicle staff

he University system last week sold $70 million in fixed-rate, long-term bonds to finance the Medical School's construction of new vaccine manufacturing laboratory in Mattapan. The bonds were issued through the Massachusetts Health and Educational Facilities Authority (HEFA).

     The project will expand the production capacity of the Massachusetts Biologic Laboratories, the country's only remaining state-run vaccine manufacturing facility, producing vaccines for tetanus, diphtheria and a number of rare diseases. The Medical School assumed control of the labs in 1997 from the Department of Public Health and has been seeking to expand the facility for some time.

     The new 80,000-square-foot facility will be constructed on a portion of the site of the old Boston State Hospital, and is scheduled to open in 2005.

     Two national bond rating firms awarded the University system an A-plus grade, citing the University's sound management and stable financial condition. Fitch Ratings, an international ratings firm based in New York and London, and Standard & Poor's, a division of the McGraw-Hill Corporation.

     Standard & Poor's cited "the university's leading position in the state's public higher education hierarchy, significant state support, stable enrollment and demand trends, historically solid financial results and the potential for further growth in resources and visibility under the current management team" in rating the bonds.

     In its rating statement, Fitch said it believes that University management "has the ability to absorb expected fiscal 2003 cuts" in state appropriation "without the creation of structural fiscal imbalance." Notable financial characteristics cited by Fitch include very strong operating margins for a public university, demonstrating conservative fiscal management by officials during prior periods of significant increases in appropriations.
The bonds are insured by MBIA Insurance Corp.