UC Budget Conference October 22, 2007 UCOP External Finance
Debt Capacity Update • No more debt targets. • Updated debt capacity presented at May 2007 Regents • $9-$11 billion assuming GRB at AA and LPRB at A • $6-8 billion assuming GRB and LPRB at AA • Five year horizon, assumes that SPWB doesn’t count against debt UC capacity • Focus on ability to pay • New fund sources as source of repayment: • Education Fund
Third Party Update • On credit, on balance sheet - 100% of debt • Off credit, on balance sheet – see below as indirect debt • Off credit, off balance sheet - none • Debt capacity scoring for third party indirect debt: • 50% of debt counted during construction period • 20% of debt ongoing if the project is meeting covenants • 100% of debt if project does not meet covenants for two consecutive years
Financing Structures • General Revenue Bonds • Limited Project Bonds • Medical Center Pooled Bonds • Third Party with Financing Trust Structure • Private Placements • Capital Leases • Commercial Paper • Bank Loans
UC Debt Outstanding*as of October 10, 2007 (in millions) 4.68%** *Excludes State Lease Revenue Bonds and campus-originated leases. ** Weighted average rate calculated with swap for auction rate bonds and variable rate notes.
Projected Long Term UC Debt by Campus* ($8.2 Billion) In $ Millions * Outstanding long term debt and long term debt to be issued for approved projects through September 2007. Excludes CP and bank loans. University of California
Projected Long Term UC Debt by Repayment Source* ($8.2 Billion) In $ Millions * Outstanding long term debt and long term debt to be issued for approved projects through September 2007. Excludes CP and bank loans. University of California
Bond Ratings AA Aa1