Refinancing delayed for structure re-evaluation

By Caryn Rosenberg

Bond refinancing has been delayed in hopes of obtaining better interest rates and a more accurate re-evaluation of the bond structure, administrators said.

Although Eddie Williams, vice president of Finance and Planning, wanted to take immediate action and proceed with the bond refinancing at the December Board of Regents meeting, he said waiting would be beneficial and hopes it will be discussed at the March meeting.

According to Williams, one reason the refinancing is delayed is to wait for more favorable interest rates.

“The market is changing every week,” Williams said. “The interest rates have not increased, and we anticipate the bond rate to decrease, which would be a favorable thing for us.”

Williams said the current bonds are financed at about 10 percent and hopes to refinance them between 5 percent and 7 percent.

Williams said they are also examining potential yields, the number of years the financing would cover and other types of instruments, such as zero coupon bonds and certain temporary bonds.

The second reason for the delay is to take more time to re-evaluate the current bond structure, according to Williams.

“We are taking more time so we can get a more definitive list of what to do with the proceeds,” Williams said.

Williams said the possibilities include a new parking structure and the proposed Student Life Center.

“We’d like to have the projects lined up when we complete the restructuring, so we would naturally start on those particular projects,” Williams said.

Student Regent James Mertes said Williams acted too hastily at the December meeting when he asked that immediate action be taken to refinance the bonds.

“By saying it should wait, he is implicitly conceding that he made a mistake,” Mertes said.

The bonds are used to finance nonacademic buildings such as the Holmes Student Center, the Chick Evans Field House and the residence halls.

“The state doesn’t build nonacademic facilities,” said Patricia Hewitt, associate vice president of Business and Operations. “They are financed through revenue bonds.”