OFFICIAL STATEMENT DATED OCTOBER 7, 2010 RATINGS: NEW ISSUE Moody’s: “Aa3” BOOK-ENTRY ONLY Standard & Poor’s: “AA-” See “RATINGS” herein. The delivery of the Series 2010 Bonds (as described below) is subject to the opinion of Vinson & Elkins L.L.P., Bond Counsel, to the effect that interest on the Series 2010 Bonds is excludable from gross income for federal income tax purposes under existing law, subject to the matters described under “TAX MATTERS” herein, and is not a specific preference item or included in a corporation’s adjusted current earnings for purposes of the federal alternative minimum tax. See “TAX MATTERS—TAX EXEMPTION” herein for a discussion of Bond Counsel’s opinion. $116,330,000 Southern SOUTHWEST HIGHER EDUCATION AUTHORITY, INC. Methodist Higher Education Revenue Bonds University (Southern Methodist University Project) Series 2010 Dated: Date of Delivery Due: October 1, as shown below The Southwest Higher Education Authority, Inc. (the “Issuer”) is offering $116,330,000 of its Higher Education Revenue Bonds (Southern Methodist University Project) Series 2010 (the “Series 2010 Bonds”). Interest on the Series 2010 Bonds accrues from the date of delivery and is payable on April 1, 2011, and semiannually on each October 1 and April 1 thereafter. The Series 2010 Bonds will be issued as fully registered bonds in denominations of $5,000 or integral multiples thereof and, when issued, will be registered in the name of Cede & Co., as nominee for The Depository Trust Company (“DTC”), New York, New York. DTC will act as securities depository for the Series 2010 Bonds. So long as the book-entry system is in effect, purchases of beneficial ownership interests in the Series 2010 Bonds will be made in book-entry form only and purchasers will not receive certificates representing their interests in the Series 2010 Bonds purchased. Principal of, any redemption price for, and interest on the Series 2010 Bonds will be payable by The Bank of New York Mellon Trust Company, National Association (the “Trustee”) to the registered owners of the Series 2010 Bonds, initially to DTC, which in turn is to remit such payments to its participants for subsequent disbursement to beneficial owners. The Series 2010 Bonds are subject to optional and mandatory redemption prior to maturity, as described herein. See “THE SERIES 2010 BONDS— REDEMPTION” herein. The payment of the principal of, redemption premium, if any, and interest on the Series 2010 Bonds constitute limited obligations of the Issuer, payable solely from payments required to be made pursuant to the Loan Agreement (as amended) between the Issuer and Southern Methodist University (the “University”). The Loan Agreement is authenticated as a “Security” under a Master Indenture, described herein, which further secures the University’s obligation under the Loan Agreement. NEITHER THE STATE OF TEXAS NOR ANY POLITICAL SUBDIVISION, OR AGENCY THEREOF, INCLUDING THE CITY OF UNIVERSITY PARK, TEXAS, IS OBLIGATED TO PAY THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2010 BONDS. NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OF TEXAS, THE CITY OF UNIVERSITY PARK, TEXAS, OR ANY OTHER POLITICAL SUBDIVISION, OR AGENCY THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF, REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE SERIES 2010 BONDS. THE ISSUER HAS NO TAXING POWER. Maturity Schedule $51,915,000 Serial Bonds Due Due October 1 Amount Rate Yield CUSIPs† October 1 Amount Rate Yield CUSIPs† 2014 2,115,000 4.000% 1.270% 845040HH0 2022 2,990,000 5.000% 3.270% C 845040HR8 2015 2,200,000 4.000% 1.620% 845040HJ6 2023 3,120,000 3.500% 3.570% 845040HS6 2016 2,305,000 5.000% 1.970% 845040HK3 2024 3,230,000 3.500% 3.700% 845040HT4 2017 2,410,000 4.000% 2.270% 845040HL1 2025 3,370,000 5.000% 3.530% C 845040HU1 2018 2,510,000 4.000% 2.560% 845040HM9 2026 3,540,000 5.000% 3.630% C 845040HV9 2019 2,595,000 3.000% 2.800% 845040HN7 2027 3,725,000 5.000% 3.710% C 845040HW7 2020 2,705,000 5.000% 3.010% 845040HP2 2028 3,895,000 4.000% 4.070% 845040HX5 2021 2,845,000 5.000% 3.180% C 845040HQ0 2029 4,075,000 5.000% 3.870% C 845040HY3 2030 4,285,000 5.000% 3.930% C 845040HZ0 $24,950,000 5.000% Term Bonds due October 1, 2035 Price: 106.854%C CUSIP No.† 845040JA3 $39,465,000 5.000% Term Bonds due October 1, 2041 Price: 106.018%C CUSIP No.† 845040JB1 THIS COVER PAGE CONTAINS INFORMATION FOR GENERAL REFERENCE ONLY. IT IS NOT INTENDED AS A SUMMARY OF THIS TRANSACTION. INVESTORS ARE ADVISED TO READ THE ENTIRE OFFICIAL STATEMENT TO OBTAIN INFORMATION ESSENTIAL TO MAKING AN INFORMED INVESTMENT DECISION. The Series 2010 Bonds are offered when, as and if issued and accepted by the Underwriters, subject to prior sale, withdrawal, or modification of the offer without notice and to the delivery of the approving opinion of Vinson & Elkins L.L.P., Bond Counsel, and the approval of the Attorney General of the State of Texas. Certain legal matters will be passed upon for the Issuer by Bond Counsel, for the University by its counsel, Paul J. Ward, General Counsel and Vice President for Legal Affairs and Government Relations, and for the Underwriters by their counsel, McCall, Parkhurst & Horton L.L.P. First Southwest Company is serving as Financial Advisor to the University. It is expected that the Series 2010 Bonds will be delivered through the facilities of DTC on or about October 28, 2010. BofA Merrill Lynch BOSC, Inc. J.P. Morgan Stephens Inc. A subsidiary of BOK Financial Corp. C Yield or price calculated based on the assumption that the Bonds denoted will be redeemed on October 1, 2020, the first optional redemption date for the Bonds, at a redemption price of par plus accrued interest to the redemption date. † CUSIP is a registered trademark of the American Bankers Association. CUSIP data herein is provided by CUSIP Global Services, managed by Standard & Poor’s Financial Services LLC on behalf of the American Bankers Association. This data is not intended to create a database and does not serve in any way as a substitute for the CUSIP Services. THE SERIES 2010 BONDS HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR HAS THE INDENTURE OR THE MASTER INDENTURE BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION OR QUALIFICATION OF THE SERIES 2010 BONDS IN ACCORDANCE WITH APPLICABLE PROVISIONS OF SECURITIES LAW OF THE STATES IN WHICH THE SERIES 2010 BONDS HAVE BEEN REGISTERED OR QUALIFIED AND THE EXEMPTION FROM REGISTRATION OR QUALIFICATION IN OTHER STATES CANNOT BE REGARDED AS A RECOMMENDATION THEREOF. THE SERIES 2010 BONDS HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THIS OFFICIAL STATEMENT. ANY REPRESENTATION TO THE CONTRARY MAY BE A CRIMINAL OFFENSE. This Official Statement includes descriptions and summaries of certain events, matters and documents. Such descriptions and summaries do not purport to be complete and all such descriptions, summaries and references thereto are qualified in their entirety by reference to this Official Statement in its entirety and to each such document, copies of which may be obtained from the University’s Financial Advisor. Any statements made in this Official Statement or the appendices hereto involving matters of opinion or estimates, whether or not so expressly stated, are set forth as such and not as representations of fact, and no representation is made that any of such opinions or estimates will be realized. NEITHER THE UNIVERSITY, THE ISSUER NOR THE UNDERWRITERS MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO THE INFORMATION CONTAINED IN THIS OFFICIAL STATEMENT REGARDING THE DEPOSITORY TRUST COMPANY OR ITS BOOK-ENTRY-ONLY SYSTEM AS SUCH INFORMATION WAS FURNISHED BY THE DEPOSITORY TRUST COMPANY. The Underwriters have provided the following sentence for inclusion in this Official Statement: The Underwriters have reviewed the information in this Official Statement in accordance with, and as part of, their respective responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriters do not guarantee the accuracy or completeness of such information. This Official Statement is delivered in connection with the sale of securities referred to herein and may not be reproduced or used, in whole or in part, for any other purposes. This Official Statement does not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the Series 2010 Bonds in any jurisdiction in which it is unlawful to make such offer, solicitation, or sale. No dealer, salesperson, or other person has been authorized by the Issuer, the University or the Underwriters to give any information or to make any representation other than those contained herein, and, if given or made, such other information or representation must not be relied upon as having been authorized by any of the foregoing. The information and expressions of opinion herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale made hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the University or the other matters described herein since the date hereof. The prices and other terms respecting the offering and sale of the Series 2010 Bonds may be changed from time to time by the Underwriters after such bonds are released for sale, and the Series 2010 Bonds may be offered and sold at prices other than the initial offering prices, including to dealers who may sell the bonds into investment accounts.