University of Virginia
IN-4: Innovation 4

In March 2015, U.Va. completed “a major bond issuance and related restructuring of its debt designed to support operations and key elements of U.Va.’s strategic plan, including the new Affordable Excellence program adopted by the Board of Visitors in March (UVA Today). $184.7 million Series 2015A Bonds were issued to provide permanent financing for capital projects of the University of Virginia, including the Battle Building, the North Grounds Rec Center, the East Chiller Plant and various phases of the Alderman Road projects. $97.7 million were designated as “Green Bonds” to finance LEED certified projects. These bonds support sustainable projects. To the best of our knowledge, this is the largest issuance of Green Bonds by a public university to date, and it enabled the University to diversify its investor base with a growing trend of socially responsible investors. The Series 2015A Bonds were issued as 30-year fixed rate bonds, with an all-in cost of funds of 3.84%.

“Direct results from the bond issues include lowering the long-term cost of the University’s entire debt portfolio from 4.21 percent to 4.13 percent, and reducing liquidity risk in the bond portfolio. “The careful and creative management of our balance sheet will generate revenue that the University can deploy in support of priorities and to address incremental increases in operating costs,” Executive Vice President and Chief Operating Officer Patrick Hogan said. “This is a critical component of Affordable Excellence, which is U.Va.’s new financial model that will assure that we can sustain excellence and affordability into the future.” Affordable Excellence is U.Va.’s commitment to students and families that a U.Va. education will remain affordable and among the best, while also significantly slashing the amount of indebtedness that Virginia families may face. The financial model also identifies sustainable funding to support a new generation of faculty and components of the Cornerstone Plan, U.Va.’s strategic plan. In advance of the financing, all three major credit rating agencies – Fitch, Moody’s, and Standard & Poor’s – reaffirmed the University’s coveted “triple-A” long-term debt rating, a key to U.Va.’s ability to save millions in interest by securing the most favorable terms available to institutions with the top ratings. With this reaffirmation, the University continues to be just one of two public universities in the country to receive “triple-A” ratings from all three major credit rating agencies. (UVA Today).”

http://emma.msrb.org/ER850979-ER664745-ER1066472.pdf