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April 2-3, 2009 OPEN – FIN – INFO 1 April 2-3, 2009 OPEN – FIN – INFO 1 University of Missouri System Debt Capacity Report a.

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Presentation on theme: "April 2-3, 2009 OPEN – FIN – INFO 1 April 2-3, 2009 OPEN – FIN – INFO 1 University of Missouri System Debt Capacity Report a."— Presentation transcript:

1 April 2-3, 2009 OPEN – FIN – INFO 1 April 2-3, 2009 OPEN – FIN – INFO 1 University of Missouri System Debt Capacity Report a

2 April 2-3, 2009 OPEN – FIN – INFO 1 Debt Outstanding by Campus June 30, 2008 Columbia$ 496 million Kansas City74 million St. Louis75 million Rolla56 million UM Healthcare157 million Total$858 million b

3 April 2-3, 2009 OPEN – FIN – INFO 1 Future Debt Financing Needs* FY2009 – 2015 *See Capital Projects list for detail c

4 April 2-3, 2009 OPEN – FIN – INFO 1 System Facilities 2009 Preliminary Proposed Projects Columbia Energy Management- $62,100,000 * Hudson/Gillett renovation - $38,145,000 Health System Orthopedic Institute and Surgery Tower - $140,000,000 Kansas City Soccer/Track facility - $8,000,000 Student Union - $36,800,000 Interactive Learning Ctr Phase I South - $10,000,000 Oak St W Phase II - $17,072,030 MO S&T Thomas Jefferson South - $12,976,483 St. Louis Flushing Meadows - $3,350,000 Refinance any existing debt with attractive present value savings (to be determined) PRELIMINARY TOTAL - $328,443,513* * Total debt funding of $ million required over term of the project. d

5 April 2-3, 2009 OPEN – FIN – INFO 1 Build America Bonds Part of the U.S. Government stimulus package Bonds must be issued by 12/31/10 Municipal issuers receive a 35% federal tax credit on each interest payment date for the life of the bond Typically long bullet maturity and large size (at least $100M; preferably $250M) Doesnt provide the optional call provision that is typically available for tax exempt issues Gain access to a more expansive, global investor base looking for diversification and longer duration Currently provides issuers with approximately 0.80% % of annual savings in the longer maturity range (20-30 years) e

6 April 2-3, 2009 OPEN – FIN – INFO 1 University of Missouri System Credit Ratings University of Missouri Long-term Debt Ratings -- Moodys - Aa2 -- Standard & Poors - AA Moodys Long-Term Debt Rating Definitions -- Aaa - strongest creditworthiness -- Aa - very strong creditworthiness -- A - above-average creditworthiness -- Baa - average creditworthiness f

7 April 2-3, 2009 OPEN – FIN – INFO 1 Estimated Debt Capacity Before FY2010 Bond Issue Credit rating is based on ratio analysis plus additional factors such as state support, market position and management The Universitys potential debt capacity ranges were estimated using five different financial ratios (see Appendix for further detail) Aa2 rating Additional net capacity of $0 to $418 million as of February 2009 Aa3 rating Additional net capacity of $71 million to $844 million as of February 2009 Note: Net debt capacity is prior to the issuance of System Facilities 2009 ($328.4 million) g

8 April 2-3, 2009 OPEN – FIN – INFO 1 Projected Debt Capacity After FY2010 Bond Issue Estimated Future Debt Capacity Over Five Years (FY ) Unrestricted Net Asset Growth Aa2 ratingAa3 rating 0%$0$300 million declining to $260 million 5%$39 million growing to $268 million $455 million growing to $773 million 8%$111 million growing to $547 million $551 million growing to $1.1 billion h

9 April 2-3, 2009 OPEN – FIN – INFO 1 APPENDIX i

10 April 2-3, 2009 OPEN – FIN – INFO 1 Estimate of Incremental Debt Capacity ($ in millions) Ratio Implied Max Debt Capacity ($ million) Net Additional Debt Unrestricted Financial Resources to Debt University of Missouri – Feb Aa2 Median0.80$1,276$418 Aa3 Median0.60$1,702 $844 Debt Service Coverage University of Missouri - June Aa2 Median3.5$1,063$184 Aa3 Median3.2$1,163$284 Expendable Resources to Debt (x) University of Missouri - Feb Aa2 Median1.80$725($133) Aa3 Median1.30$1,004$146 j

11 April 2-3, 2009 OPEN – FIN – INFO 1 Additional Ratios Used to Calculate Implied Debt Capacity Ratio Implied Max Debt Capacity ($million)Net Additional Debt Total Resources to Debt (x) University of Missouri - Feb Aa2 Median2.8$664($194) Aa3 Median2.0$929$71 Debt to Cash Flow (x) University of Missouri - June Aa2 Median3.8$ 991$112 Aa3 Median4.6$1,200$320 k

12 April 2-3, 2009 OPEN – FIN – INFO 1 Debt Capacity Credit Profile $ in millions (1)Moodys Public College and University Medians 2007 (Based on 2006 Financial and Enrollment Data) l

13 April 2-3, 2009 OPEN – FIN – INFO 1 Debt Capacity Credit Profile $ in millions (1)Moodys Public College and University Medians 2007 (Based on 2006 Financial and Enrollment Data) m


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