CHEFA INSIGHTS for July 2025

Celebrating the Retirement of Michael Morris, Managing Director of Client Services

CHEFA extends its heartfelt gratitude and best wishes to Michael Morris, who is retiring after an extraordinary 35-year career with the Authority. Since joining CHEFA in 1990, Michael has served in multiple key roles, culminating in his appointment as Managing Director of Client Services in July 2015.

Throughout his tenure, Michael provided strategic oversight of bond issuance and closing processes, led the development of new products and sectors, and managed the Authority’s Arbitrage Rebate and Compliance functions. Under his guidance, CHEFA completed over 600 bond transactions totaling more than $24.3 billion—helping Connecticut’s nonprofit institutions meet critical capital needs and strengthening the state’s health, education, and cultural infrastructure.

Before joining CHEFA, Michael began his career in residential mortgage banking. He holds both a B.S. in Economics/Finance and an MBA from the University of Hartford.

Michael’s deep institutional knowledge, thoughtful leadership, and steadfast commitment to public service have left a lasting mark on CHEFA and the communities we serve. We congratulate him on his well-earned retirement and thank him for his decades of dedication.

CHEFA Awards Over $1M Through FY 2025 Nonprofit Grant Program

CHEFA Grants Program Manager Jen Chapman noted that half of the 18 grant awards made in the FY25 cycle went to programs that support access to a range of healthcare services for Connecticut residents. “The Authority received a record number of Letters of Interest this cycle, indicating significant need among Connecticut’s nonprofit organizations. With this latest round of grant funding, CHEFA continues its 60-year history of working with nonprofits to support communities throughout the state,” she said

Jeanette W. Weldon, CHEFA Executive Director, said, “These grants are focused on key sectors that are improving access to medical care and driving educational innovation within Connecticut communities. CHEFA’s support of the state’s nonprofits through grants, tax-exempt bonds, and loans continues to provide resources to essential organizations that address the needs of Connecticut residents.”

Since its inception in 2002, CHEFA’s Grant Program has provided more than $52 million to Connecticut’s nonprofit organizations.

FY 2025 Nonprofit Grant Awards

CHEFA closes a $500,000,000 transaction with Yale University

On May 15, 2025, CHEFA closed on a $500,000,000 transaction for Yale University. The bonds were issued in three series with five, seven and ten-year term modes. Proceeds from the bonds will be used to finance a portion of two critical initiatives of the University for its Upper Science Hill Development Project in the Science Hill areas of the University’s New Haven campus and renovations to and expansion of the Osborn Memorial Laboratories located at 165 Prospect Street. The bond sale was well received in the market with yields ranging from 3.28% to 3.66% for the three series of bonds. The $500,000,000 offering was CHEFA’s largest new money financing in its 60-year history.

CHEFA Chats – CHEFA at 60: Milestones, Missions & Moving Forward

In this episode of CHEFA Chats, host Dan Giungi sits down with CHEFA’s Managing Director Michael Morris and Controller JoAnne Mackewicz to reflect on six decades of impact, innovation, and evolution.

With over 30 years of combined experience, JoAnne and Mike share stories, key milestones, and major changes they’ve witnessed at CHEFA—from paper-heavy processes to digital transformation, from traditional bonds to flexible loan programs, and from sector-specific solutions to statewide impact.

Tune in to hear how CHEFA has continuously adapted to meet the needs of Connecticut’s nonprofit sector—and what the future holds for this lean, responsive, and mission-driven organization.

Listen on Spotify

FY 2024 Higher Education Sector Report Summary

Demand: Most of the eleven private Connecticut based institutions that make up CHEFA’s higher education portfolio have experienced increased market demand in FY 2025. Application volume remains very strong, is at its highest level in FY 2025, up 40% from FY 2021, resulting in an improved selectivity rate during this time. Total FTE enrollment has steadily increased in each of the past five years despite slightly lower matriculation yield medians.

Key Financial Ratios: FY 2024 financial results reflect a stable view of the sector supported by favorable operating and cash flow margins and solid balance sheet metrics. The EBIDA margin median increased from 12.7% in FY 2023 to 16.2% in FY 2024 and is at its second highest level over the past five years. The portfolio remains heavily reliant on tuition and auxiliary revenue, with the median accounting for approximately 79% of total revenue. The net tuition revenue median increased 3.4% from the prior year but is somewhat offset with a steady climb in the tuition discount median, from 38.0% in FY 2020 to 44.5% in FY 2024. The portfolio is still considered leveraged but remains manageable across the sector with a lower debt service burden median and a strong debt service coverage ratio median at 3.2 times.

Total cash and investments increased 27% from five years ago and is at its second highest level, but the total cash and investments to operations median of 1.8 times in FY 2024 is at its lowest level over the past five years. The cushion for debt median remained relatively flat over the past five years, averaging 1.9 times. The cushion for debt ranged from 1.2 times to 9.8 times and five institutions had at least a favorable 2.0 times coverage in FY 2024. The FY 2024 monthly days cash on hand median of 311 days declined for a third consecutive year from its high of 432 days in FY 2021. FY 2024 individual medians of the private institutions varied significantly from a low of 78 days to a high of 772 days.

Total capital investment for the portfolio, increased 40.1% over the past five years with 91% of the portfolio investing more in their plant than their annual depreciation expense in FY 2024 compared to only 73% from five years ago. However, the FY 2024 median capital spending ratio of 2.0 times decreased from 2.4 times in FY 2020.

Federal Policy Updates: As the new administration sought policy change, several potential threats loomed over the higher ed sector, warranting Moody’s to revise its sector outlook from stable to negative. Potential threats include federal funding cuts through NIH funding caps and the failure to comply with DEI directives, loss of tax-exempt status, increased endowment tax, international student visa revocations and tariff assessments. While some of these changes have already come to fruition, we will have to wait for the Senate to pass the budget bill and for trade negotiations to resume to fully understand what the impacts will be to the sector.

To learn more about CHEFA’s Higher Education Sector report for FY 2024 and the performance of its eleven private institutions that make up our higher education portfolio, please contact Krista Johnson, Senior Credit and Compliance Specialist at kjohnson@chefa.com.