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Penn Trustees: $350 Million of Indebtedness (2012 Bonds) for Energy-Efficient Projects

March 27, 2012, Volume 58, No. 27

On Friday, March 23, the University of Pennsylvania Board of Trustees' Executive Committee passed a resolution to authorize the incurrence of indebtedness for the University, to take advantage of the market. The University will incur new indebtedness and will delegate to the Debt Subcommittee of the Budget and Finance Committee the power to determine the terms of the 2012 Bonds.

The Trustees approved the incurrence of up to $350 million of indebtedness. It may be for a term of up to 101 years and may bear interest at a fixed or variable interest rate. EVP Craig Carnaroli said that over the past year there has been a new phenomenon known as Century Bonds with a low taxable rate that have been issued only within higher education at a such institutions as MIT, CalTech and Ohio State.

President Amy Gutmann suggested that the proceeds of these bonds would enable Penn to move forward on its Climate Action Plan goals—to complete more energy-efficient projects more quickly thereby generating more cost savings, including deferred maintenance, renovations, updating HVAC systems and lighting.

The EVP and the Vice President for Finance and Treasurer are authorized to determine the method of sale of any indebtedness incurred, to select an investment banker or a lender or purchaser, to select a bank or other financial institution to provide credit and/or liquidity support for the indebtedness, to select an insurer to provide insurance for the indebtedness, to select a remarketing agent, and a trustee and paying agent, and to take all action for such indebtedness.

Almanac - March 27, 2012, Volume 58, No. 27