Regents approve three University of Iowa refunding bonds, saving millions
The state Board of Regents voted unanimously to approve three refunding bonds for the University of Iowa. The interest rates remained low this spring, allowing the university to save more than $10 million.
Elizabeth Bergman is seen discussing refunding bonds during the Iowa Board of Regents meeting on Wednesday, April 14, 2021.
April 14, 2021
The state Board of Regents approved Wednesday three bonds to be refunded to University of Iowa departments.
The sale, authorizing, and providing of issuance for the Athletic Facilities Revenue Refunding, Facilities Corporation Revenue Refunding, and Telecommunications Facilities Revenue Refunding Bonds were unanimously passed by the regents.
Elizabeth Bergman from Baker Tilly Municipal Advisors LLC, the regents’ municipal advisor, said interest rates have remained at a historically low level, allowing the UI to save millions on each bond.
“While there was a slight uptick in [interest] rates last month, movement in the last two weeks have been in the university’s favor resulting in savings which are even better than what we expected when we first undertook these refundings,” she said.
The athletics and telecommunications bonds were both awarded to RW Baird while the facilities bond was awarded to Bank of America, Bergman said.
The true interest cost of the bonds range from 1.305 percent to 1.472 percent, she said. The principal is due between 2028 and 2036, she said.
Regent David Barker commended Bergman for the rate and the time of the bonds.
When asked by regents about the other bids that were on the table, since each bond received between seven and 10 bids, Bergman said the bidding process was tight.
She said the athletics bid allows for $2.7 million in savings alongside saving $5.395 million for the facilities bond and $1.54 million for the telecommunications bond.
During the bond process, Bergman said the university’s credit rating was reviewed in conjunction with the refundings, and the ratings were affirmed, as they have been for all three of the regents’ universities during the pandemic.
“It’s been a really challenging time for universities so the ability for all three universities to maintain their high credit ratings is a real tribute to the strength of all three universities,” she said.
