1. Bond Financing Update September 25, 2007

2. Keys to Successful Bond Financings Must have a prioritized list of projects tied to the strategic plan with a long term view – 10 years at least. Must be able to talk about projects on a strategic outcomes basis. Must know what our programs, research, and student mix will look like over the long term horizon. Must have the President and VP of Finance lead the rating agency presentation(s). Must understand our financial ratios relative to financings.

3. Needs and Opportunities ESCO Project: UI’s technical audit to identify potential energy savings resulted in a need to finance those projects. Refunding of Existing Bonds: Market conditions presented an opportunity to achieve substantial savings on existing debt.

4. Planning Process 1.Development of a 30 Financing Proforma: Modeling of Repayment Capacity Conservative Student Enrollment Assumptions Identification of Revenue Sources 2.Review of Financing Methods: Bank Loans Lease Purchase/Certificates of Participation Bonds 3.Assessment of Financing Needs 4.Assembling the Team

5. Consultants: Lee White, George K. Baum & Co - Investment Banker Richard Skinner, Skinner Fawcett – Bond Counsel Blake Wade, Ballard Spahr – Bond Counsel UI Team Members: Tyrone Brooks, Admin. Operations – Financing Strategies Jana Stotler, Strategic Budget & Controller – Financing Strategies Kent Nelson, General Counsel – Legal Counsel Ron Town, Business Srvcs & Accounting Srvcs – Debt Accounting Theresa James, General Accounting – Debt Accounting Trina Mahoney, Budget Office – Capital Budgeting Bond Team

6. How We Progressed February ‘07 Presentation on financing potential to meet UI’s needs to VP of Finance & Admin. Beginning review of potential projects for bonding March ’07 Presentation to President on potential of bond financing April ‘07 Presentation to Board of Regents on future financing plans June ‘07 Bond team assembled & began pre-issuance work August ‘07 Capital projects for bond financing approved by President Rating agency presentation at UI Bond Series 2007 materials assembled September ‘07 Agenda item submitted for Issuance of Series 2007 Bonds to Board of Regents for October meeting.

7. Financing Philosophy Development of long-range financing strategies to assist UI’s campus renewal and strategic plan. 30 Year Strategy Strategic and prudent use of bonds PhaseFiscal YearsPotential “New Money” Bonds I2008 - 2016$114 million II2017 - 2025$ 70 million III2026 - 2035$100 million IV2036 - 2040$ 50 million

8. Phase I Details Estimated Timeline and Amounts: Bond Refunding: $65 M – October 2007 ESCO Project: $35 M – October 2007 Series 2008: $34 M – December 2008 Series 2010: $45 M – December 2010

9. THE REGENTS OF THE UNIVERSITY OF IDAHO (UNIVERSITY OF IDAHO) Variable Rate FSA Insured with Dexia Liquidity Facility Adjustable Rate General Revenue Bonds Series 2007 StructurePar Amount Deposit to Escrow or Project Fund Average Nominal Savings as a % of Refunded ParCash NPV Savings Average NPV Savings as a % of Refunded ParAll In Cost Average Net Annual Debt Service 1 Series 2007 $94,605,000$97,600,000 4.121%$5,271,438 Series 2007B, New Money Issue $33,450,000$35,000,000 4.246%$2,107,605 Series 2007A, Total Refunding Program $61,155,000$62,600,00021.846%$6,478,59110.765%4.025%$3,125,723 1 Series 1999 Refunding $16,180,000$16,571,79010.223%$1,083,4456.715%4.058%$1,366,857 2 Series 1999A Refunding $1,180,000$1,204,7409.396%$72,3236.155%4.058%$99,757 3 Series 1999B Refunding $5,000,000$5,117,96012.092%$403,0498.110%4.058%$422,567 5 Series 2001 $38,795,000$39,705,51028.435%$5,531,98114.544%4.013%$2,123,752

11. Credit Rating Comparisons Expendable FTEExpendableResources Reliance onOperating Source DateTotal DebtEnrollmentResourcesto Debtto OperationsState FundingMargin University of Idaho - Current2006$127,010,000 11,110$114,283,0790.900.3838.0%7.0% UI - Pro-Forma $100 M2006$227,010,000 11,110$114,283,0790.500.3838.0%7.0% Moody's Median - A12007$141,620,000 18,132$141,620,0001.000.4031.8%1.3% Peer Comps - A1 University of Alaska2005$123,000,000 17,454$172,200,0001.400.3141.0%-5.1% Southern Illinois University2006$286,000,000 28,777$143,000,0000.500.2143.0%1.3% Ball State2006$142,000,000 16,533$355,000,0002.500.829.2%7.8% Central Michigan2006$187,200,000 22,036$149,760,0000.800.5627.3%2.2% Montana State2006$130,200,000 16,774$104,160,0000.800.3021.6%1.7% University of North Dakota2006$110,000,000 11,405$110,000,0001.000.4025.0%3.5% Oklahoma State2005$391,000,000 19,683$273,700,0000.700.5036.0%-1.9% Western Washington2006$8,000,000 11,713$7,200,0000.900.4030.8%-1.3% UNC Charlotte2007$174,900,000 18,855$139,920,0000.800.5043.0%3.6% University of Vermont2006$401,300,000 10,580$361,170,0000.90 47.9%5.2%

12. What the Rating Agencies Said Moody’s A1 Rating with Stable Outlook “…outlook for UI reflects its fundamental market and operational strengths despite its high leverage and modest enrollment declines. Stabilization of enrollment and continued balanced operational performance are important to maintaining a stable credit profile as the University adds additional debt in coming years.” “What could change the rating – UP…dramatic increase in financial resources…stabilization of enrollment levels and continued debt service coverage would improve the University’s credit strength.” “What could change the rating – DOWN Continued enrollment declines; deterioration of balance sheet…greater borrowing than currently anticipated.”

13. What the Rating Agencies Said, Con’t Standard & Poor’s A+ Rating with Stable Outlook “…outlook anticipates stabilized demand and improved fundraising It also reflects continued state financial support…further efforts to achieve balanced financial operations…future debt will be matched with additional financial resources.”

14. Moving Forward Continue implementation of strategic plan Exhibit consistent and strategic enrollment growth Prudent operational performance and resource stewardship Allocation of funds specifically to the top strategic priorities Stable growth in resources with an emphasis on academic operations, research enterprise, and donor giving

15. Questions?