University of Missouri Derivatives Policy Approval for Debt Management

1. Approval of Derivatives PolicyUM University of Missouri System Board of Curators February 2-3, 2012 Finance Committee

2. Derivatives Policy - Debt • Proposed policy governs risk management practices with respect to the use of derivatives in conjunction with the management of the University’s debt portfolio. • The guidance contained in this proposed policy is generally consistent with existing University practices. • Documentation of such practices within this policy is intended to satisfy requirements of a recent state statute.

3. Derivatives Policy - Debt • The University has two existing interest rate swaps that were previously approved by the Board of Curators in 2002 and 2007. • Additionally, at a December 2011 meeting of the Board Executive Committee, an additional interest rate swap was approved as part of a pending transaction. • All three of these interest rate swaps convert floating rate debt to a fixed rate of interest. Details of the swaps are provided in Board materials.