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Cash Management - Debt Issuance and Monitoring

The Treasurer's Office oversees the issuance of all university debt. This includes:

University of Missouri Financial Information

Capital Project Notes

  • Short-term annual borrowing to finance various capital projects including small construction projects, furniture, fixtures, equipment and library books
  • Notes are sold in mid-June and settle on the first business day in July
  • Mature on the last business day of June
Fiscal Year $ Amount Issued
2011    $0
2010 $125 million
2009 $100 million
2008 $160 million
2007 $115 million
2006 $80 million
2005 $168 million
2004 $0
 

System Facilities Revenue Bonds 

In November 1993, the university consolidated its outstanding debt used for construction facilities and buying equipment for operations. The primary purposes of consolidation were to lower costs and to increase borrowing flexibility. The university decreased borrowing costs by: (1) strengthening long-term credit rating and achieving lower interest costs than issuing under separate enterprise; (2) spreading the fixed issuance costs across larger bond issues; and (3) reducing the fixed costs by simplifying the debt structure. Borrowing flexibility was accomplished by: (1) simplified marketing involving a single borrowing entity; (2) enhanced debt-capacity on a systemwide basis; and (3) increased current and future flexibility.

  • Tax-exempt revenue bonds to finance facilities for auxiliary enterprises including residence halls, student centers, recreation centers and parking garages.
  • Rated Aa1 by Moody's and AA by Standard & Poor's
  • The bonds bear interest at fixed and variable rates ranging from 2.0% to 5.25% and mature at various dates through November 2039.
Outstanding System Facilities Debt Summary
Issue 1998 System Facilities 2000 (Fixed Rate) System Facilities 2000 (Variable Rate) System Facilities 2001A (Variable Rate) System Facilities 2001B (Fixed Rate) System Facilities 2003A (New Money) System Facilities 2003B (Rfd 1993) System Facilities
Issue Date 4/23/1998 3/30/2000 3/30/2000 8/23/2001 8/23/2001 11/12/2003 11/12/2003
Purpose Refund Power Plant
Refund UMC Parking
New Money
New Money
Current Refunding of 1993 Rec Bonds
New Money
St. Louis and Columbia Parking and Misc.
Advance Refunding
Series 1997 maturing on and after 11/1/2008
New Money
Various at all campus housing, rec.ctr., student ctr.
Current Refunding
Refund O/S
Series 1993 bonds
Original Par 65,010,000 28,950,000 50,000,000 39,225,000 44,975,000 118,080,000 37,085,000
Call Date 11/1/2006 N/A Continuously Continuously 11/1/2011 11/1/2013 11/1/2013
Coupon Range 3.35-5.1% 5.0-5.2% Variable Variable 4.0%-5.125% 2.0%-5.25% 2.0%-5.0%
Outstanding at 06/10 11,155,000 3,620,000 50,000,000 33,685,000 42,060,000 11,620,000 28,575,000
Maturity 11/1/2017 11/1/2010 11/1/2030 11/1/2031 11/1/2027 11/1/2031 11/1/2023
Outstanding System Facilities Debt Summary (Continued)
Issue 2006A (Fixed Rate) System Facilities 2006B (Variable Rate) System Facilities 2007A (Fixed Rate) System Facilities 2007B (Variable Rate) System Facilities
Issue Date 2/7/2006 2/7/2006 7/12/2007 7/12/2007
Purpose New money projects at UMC, UMKC & UMSL/advance refund 1996 and 1998 Health System Debt and portion of 1998 System Facilities debt New money projects at UMC, UMKC and UMSL New money projects at UMC, UMKC, & MO S&T Refund a portion of System Facilities 2003A
Original Par 260,975,000 39,705,000 262,970,000 102,250,000
Call Date 2028-11/1/2011, 11/1/2016 Continuously 2037 - 11/1/2014, 11/1/2017 Continuously
Coupon Range 3.1–5.0% Variable 4.0-5.0% Variable
Outstanding at 06/10 235,195,000 3,620,000 255,440,000 101,535,000
Maturity 11/1/2028 11/1/2035 11/1/2037 11/1/2031
Outstanding System Facilities Debt Summary (Continued)
Issue 2009A (Fixed Rate) System Facilities 2009B (Fixed Rate) System Facilities
Issue Date 7/16/2009 7/16/2009
Purpose New money projects at UMC, Health Care, UMKC, MO S&T and UMSL New money projects at UMC, Health Care, UMKC, MO S&T and UMSL
Original Par 256,300,000 75,760,000
Call Date N/A 11/1/2019
Coupon Range 5.96% before 35% federal subsidy 2.92% - 5.0%
Outstanding at 06/10 256,300,000 75,760,000
Maturity 11/1/2039 11/1/2021

 

Internal Borrowing Procedures

From time to time, the university has leased equipment with an option to purchase, rather than purchasing the equipment outright. In general, these financing transactions carry interest rates in excess of the university’s cost of borrowing. Real estate purchases have also sometimes been financed with a third party. These transactions, too, can usually be financed cheaper by the university. In 1993, the university issued bonds to consolidate most of its outstanding debt. With the new consolidated debt structure, the university has a ready vehicle for financing such transactions at tax-exempt rates.

A Capital Pool has been established to manage the consolidated debt structure. To the extent there are balances in the Capital Pool, they may be used to finance borrowings within the university.

Since new bond issues will probably not be more than once per year, the following internal borrowing procedures will be available to finance purchases during the year. The internal loans may later be incorporated into debt borrowings.

Policy

Loans will be made under the following terms:

  • Amount borrowed will not exceed the cost of the equipment or real estate.
  • Minimum loan - $5,000; no maximum.
  • Period of time will not exceed the useful life of the property or equipment being acquired.
  • Amounts over $50,000, or financed longer than three years, must have special written justification.
  • Interest will be charged at a rate determined annually, based upon market conditions. A rate will be established prior to the beginning of each fiscal year.
  • Loans over $500,000 will require a chancellor’s approval. Such borrowings also may require review by the University of Missouri Board of Curators. The interest rate will be set based on current market conditions and, if eventually financed externally, will bear the actual interest rate of the external financing.
  • All loans must be payable from either General Operating or Designated Funds. Level monthly payments will be charged against the appropriate account by mechanical entry in the accounting system.
 Procedures

For loans under $50,000, and no longer than three years, the following procedures apply:

  • The campus will determine the appropriateness of the purchase and the need for financing in the normal manner. If financing is deemed necessary, the Treasurer’s Office at (573) 882-2968, will provide information on loan terms and estimated payments and will give preliminary approval for the loan.
  • At the time the purchase order or contract is completed, a loan application form (copy attached) should be completed and sent to the Treasurer’s Office at 118 University Hall, Columbia, MO 65211. Fax: (573) 882-6595.
  • The approved loan application form will be returned to the Purchasing Department.
  • When the voucher is received and approved, a copy should be sent to the Treasurer’s Office at 118 University Hall, Columbia, MO 65211. Fax: (573) 882-6595.
  • Funds will be transferred to the account from which the property is to be purchased.
  • Monthly payments will commence as indicated on the loan application form.

For consideration of loans in excess of $50,000, or for a term longer than three years, the following procedures apply:

  • A financial justification and plan for repayment must be provided.
  • If the proposed loan exceeds $500,000 and/or five years in length, a complete financing plan and justification must be provided; the chancellor must approve the loan application. The aystem's Facilities Financial Advisory Committee will advise on the ability to finance the loan from the Capital Pool; system administration will determine the ability to finance such loans from external funds.

Reviewed 2013-04-08.