A $54,000-a-year school in Pimco’s hometown plans its own foray into the bond market – BNN Bloomberg

(Bloomberg) — An elite private college in Newport Beach, Calif., home of bond fund firm Pacific Investment Management Co., is making its own foray into the debt market.

Sage Hill School, whose board of trustees includes executives from Pimco, Goldman Sachs Group Inc. and video game maker Activision Blizzard Inc., is selling about $54 million in municipal bonds to build a middle school and new sports facilities. The school said it was the largest capital project since 2018.

Sage Hill is the latest California private school to turn to the public debt market to raise money, joining the college-like push to continue attracting new students with new amenities.

Harvard-Westlake School made its debut on the municipal market last month, funding athletics facilities. In September, the all-girls school Castilleja School Foundation in Palo Alto – in the heart of Silicon Valley – also took out loans for the first time to finance extensive renovation work.

Sage Hill opened in 2000 and is located on a 28-acre campus in Newport Coast, a community at the southern end of Newport Beach. The latest project is expected to cost about $55 million and include a 38,600-square-foot building for middle school classrooms, a competition-sized gymnasium and administrative offices, scheduled to open in fall 2026.

Incorporating the new grades would increase enrollment — which reached a record 590 this year — by about 140 students. Average tuition at Sage Hill is about $54,000 per year and class sizes are limited to 14 students. The acceptance rate is now 55%.

“Today, at the strongest point in our short history, Sage Hill seizes the opportunity to move forward,” Patricia Merz, school superintendent, said in a statement.

The school’s bonds will be sold through the California Enterprise Development Authority and the price will be announced Nov. 14, according to investor roadshow documents. S&P Global Ratings gives it an A-, the seventh-best grade, citing “stable demand profile, experienced management team, positive operating results and healthy liquidity.” The school had an endowment of $34 million at the end of June, according to its prospectus.

Proceeds from the bond issue will also be used to refinance a nearly $16 million bank loan from local F&M Bank. Separately, the school plans to raise $25 million for the project and has raised $15.6 million so far.

– With assistance from William Selway.