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Debt Management Navigating Through Uncharted Volatility

Debt Management Navigating Through Uncharted Volatility. Bill Doering Treasurer, University of Cincinnati Pam McCreary Director Debt Management, University of Cincinnati. UNIVERSITY OF CINCINNATI. Ohio Public University – 1819 1 of 2 Carnegie High Level Research Universities in OH

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Debt Management Navigating Through Uncharted Volatility

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  1. Debt ManagementNavigating Through Uncharted Volatility • Bill Doering Treasurer, University of Cincinnati • Pam McCreary Director Debt Management, University of Cincinnati

  2. UNIVERSITY OF CINCINNATI • Ohio Public University – 1819 • 1 of 2 Carnegie High Level Research Universities in OH • 14 Colleges and 2 Schools; 2 Branch Campuses • Over 37,000 Total Enrollment • Approximately $1 Billion Operating Budget • $833 Million Endowment (as of June 30, 2009) • $191 Million Operating Cash (as of June 30, 2009) • Over $1 Billion in Outstanding Debt • Ratings: Moody’s A2; S&P A+ (as of September, 2009)

  3. 2.5% 3.5% 13% 81%

  4. 2% 4% 3% 10% 81%

  5. Source: Ohio Board of Regents, 03/24/2009

  6. Institutional Liquidity LOW HIGH • Capitalized Interest • LOC Provided on VRDN • Internal Overdrafts • BANS • Bridge Financing • Frequency in Market to Sell Bonds • Commercial Paper • Self-Liquidity on VRDN • Dedicated Internal-Funded Borrowing

  7. Proposed Debt ServiceRestructuring - 2008 & 2009 Maturities Annual Debt Service – Before and After Restructuring (Net of Assumed Interest Earnings) General Receipt Bonds, Certificates of Participation and Capital Leases Note: See Present Value Analysis of Before and After Debt Service Payments 9

  8. How Did UC Get Things Accomplished So Quickly? • Refunding Board approved resolutions • Update annually to be poised to act • Access to Sr. VP of Finance and board members • Set up weekly conference calls with investment, debt, finance • Tap into internal experts, if available • Discuss/Review with Chief Investment Office for Endowments • Education • Crash course on swaps

  9. How Did UC Get Things Accomplished So Quickly? • Tap into colleagues • Decision to do Swap • Needed Swap Advisor FAST • Ready access to underwriter, bond counsel and issuers council • Multi-year contracts • Long term relationships • Flexibility of finance team • Weekly conference calls • Regular in-person meetings • In the market frequently • Quarterly, on average

  10. Questions?? • Contact Us • bill.doering@uc.edu • 513-556-4513 • pam.mccreary@uc.edu • 513-556-3149

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