Upper Iowa University secures $44.3 million of bond financing
FAYETTE, Iowa (July 15, 2010) – Upper Iowa University has successfully secured $44,290,000 from revenue bond financing that will be used to complete construction of new student-focused buildings on UIU’s residential campus here. UIU is completing the first phase of its largest capital construction program ever, a $75 million plan. The current phase includes a suite-style residence hall, a Liberal Arts building, a student center, construction of a retail location in downtown Fayette, and other campus improvements. The residence hall and new academic building are scheduled to be open for Fall 2010 classes, and the student center, downtown location, and campus improvements will go into operation in January 2011.
Issuance of the bonds through the Iowa Higher Education Loan Authority this month followed receipt of a BBB+ stable rating by Fitch Ratings on April 30.
“Upper Iowa University is proud to have received such a solid rating from this distinguished rating agency,” said UIU President Alan G. Walker. “The agency’s rating at a time when many other colleges and universities are being downgraded is a testament to the reality that UIU is headed in the right direction and making sound decisions that will secure the University’s future. We are grateful to the agency for this first-ever bond rating for the University.”
Fitch’s credit summary stated: “Fitch views UIU's ability to consistently generate an annual operating surplus as a key credit strength. Averaging 5.6% annually over the past five fiscal years, UIU's solid margins are due, in part, to management's conservative budgeting practices.”
Fitch Ratings cited:
- Positive enrollment trends including increased student figures and matriculation rates are expected to continue,
- Low liquidity ratios for the rating category, in part, because of UIU's annual contributions to pay-go capital; however, liquidity ratios should benefit to some extent from reimbursements as part of the current offering;
- Relative revenue diversity stems from the various modalities by which UIU offers its educational programs.
Don Aungst, executive vice president and UIU chief financial and planning officer, noted that the Fitch rating and the level of institutional buyer interest in the bonds resulted in a “true interest cost” of 5.95 percent for the bond issue and is projected to save the University more than $13 million in total debt service expenses over the 30-year life of the bonds.
“The receipt of a BBB+ stable rating and the successful sale of the bonds for our projects provides external validation of our ascending institution,” Aungst added. “Fitch validated our credit worthiness, and institutional buyers were willing to invest in the future of UIU.”
Contact:
Monica Bayer Heaton
Executive Director of Communications and Marketing
Phone: 563-425-5773
Cell: 515-291-2070
heatonm@uiu.edu
About Upper Iowa University
Founded in 1857, Upper Iowa University is a private, not-for-profit university providing undergraduate and graduate degree programs and leadership development opportunities to over 6,600 students—nationally and internationally—at its Fayette campus and learning centers worldwide. Upper Iowa University is a recognized innovator in offering accredited, quality programs through flexible, multiple delivery systems, including online and independent study. For more information, visit www.uiu.edu.