The capital raised from the bond sale will refinance Harvard's outstanding debt, as the University repays old bonds and issues new ones with lower interest rates. In contrast to capital bonds, which raise money for specific projects, these particular bonds will refinance debt sold to finance projects in the 1970s.

The bond sale has overshot its goal by saving four percent on the costs of previous bond offerings. In certain maturities, bonds were oversubscribed--there were more orders for the bond than was offered, allowing for lower interest rates.

"We were very pleased," said Laura C. Sanders, the University's manager of debt and treasury operations.

HEFA is an independent state agency that assists the capital raising efforts of educational, health, cultural and other non-profit institutions through loan programs and the sale of tax-exempt bonds.

The bonds carried the highest credit ratings from agencies such as Standard & Poor's and Moody's Investor Services, which rated the bonds AAA and Aaa, respectively. The agencies reviewed the University's credit profile and financial assets, assigning a credit rating to reflect Harvard's ability to pay back the debt.

After the refinancing of the fixed-rate bonds, a similar refinancing of Harvard's variable-rate debt, with $197 million in bonds, is expected to begin tomorrow.