Harvard University — armed with a AAA credit rating and $50 billion endowment — sold $750 million in taxable bonds this week as buyers shrugged off recent controversies swirling around the school.

The debt priced at 47 basis points above similar-maturity Treasuries, compared to earlier price talk of 60 basis points. That’s one of the tightest spread of any 11-year investment-grade bond dating back to at least 2009, according to a person familiar with the matter who asked not to be named because they weren’t authorized to speak publicly. The bonds rallied in secondary trading Wednesday morning, a further sign of strong investor appetite.

“There’s insatiable demand for premier names in the higher-ed space. Obviously Harvard would be one of those at the top of the tier,” said Chris Brigati, senior vice president at SWBC Investment Services, adding that the deal did “extremely well.”

The debt raise bucked any concerns that the recent departure of Harvard’s president and the withdrawal of some prominent donors might impact the appetite for its bonds. The securities, which were heavily marketed to foreign investors and pension funds, were sold in the corporate bond market, allowing for more flexibility regarding the use of proceeds and making them eligible for inclusion in corporate bond indexes.

Harvard has come under scrutiny from lawmakers, students, alumni and donors in the wake of Hamas’s Oct. 7 attack on Israel amid a backlash against diversity and inclusion initiatives. In addition to forcing the resignation of President Claudine Gay, prominent benefactors have signaled they won’t commit more money to the school. Moreover, the University is facing inquiries in two Congressional committees, federal lawsuits and possible government actions could take away financial support.

Too Big to Fail
Despite the cloud hanging over it, Harvard is among is among borrowers in the muni market that are “too big to fail,” according to Eric Kazatsky, municipal strategist for Bloomberg Intelligence. With the school’s endowment roughly 10 times bigger than its debt outstanding, “they’re infallible to a certain degree,” he said.

For the pricing to be affected by the recent controversies, Kazatsky said a major swath of investors would have needed to shun the deal. Based on the pricing, he said that did not happen.

In its bond offering documents, Harvard noted that it was facing government investigations into allegations of bias on campus. There are no proceedings that would be likely to have a “material adverse” effect on the school’s ability to meet its commitments related to the bonds, the documents say.

The majority of the issuers in Bloomberg’s AAA Corporate Bond Index are either elite colleges like Harvard, Yale University and the University of Notre Dame or wealthy not-for-profit foundations. There are only two traditional corporations left in the index with top ratings, Microsoft Corp. and Johnson & Johnson, according to data compiled by Bloomberg.

Harvard’s bonds are index-eligible and could have appealed to buyers abroad and pension funds. Multiple pages in the deal’s offering documents were targeted at foreign investors outlining regulatory language for potential buyers in Hong Kong, Singapore, Japan, Canada, and Switzerland.

Goldman Sachs Group Inc. led the taxable bond sale. Harvard is also planning to borrow $900 million of tax-exempt bonds in April, according to a regulatory filing. The deal – which is raising money for general corporate purposes – came to market with a corporate identifier.

A spokesperson for Harvard didn’t have immediate comment. A Goldman spokesperson declined to comment.

Last week, S&P Global Ratings analysts said potential risks are looming “over the medium term” that could lead to an impact on student demand, fundraising, and other financial support that Harvard receives. But the ratings company said the school’s financial strength mitigates those challenges.

This article was provided by Bloomberg News.