The Central Washington University Board of Trustees Tuesday approved refinancing $29.175 million in bonds in a sale that will save the university $4.6 million over the next 22 years.
The bonds were initially issued in 2008 to fund the construction of Wendell Hill Hall.
“Refinancing these bonds will save us about $279,000 per year in interest over the next two decades,” said CWU President James L. Gaudino. “That’s more than we originally anticipated saving, which is great news.”
The board unanimously approved the refinancing the bonds during a special telephonic meeting. Under the terms of the new bonds, the university will pay an interest rate of 2.7 percent.
“The original bonds were sold when the university’s bond rating was not as favorable as it is today,” noted Joel Klucking, CWU’s chief financial offer and vice president for Business and Financial Affairs. “Ultimately these savings will benefit students either through new facilities or an advanced timeline on necessary renovations.”
Fortunately, through exercising fiscal responsibility over the past several years, we’re in a position to be able to take advantage of better interest rates and save money.”
Klucking said Moody’s Investors Service last week reaffirmed CWU’s A1 bond rating, which is the highest rating a comprehensive university such as CWU can achieve. He said the Moody’s analysts also were impressed by the school’s enrollment increases last year and for the coming academic year.
University bonds are supported by revenue from residence halls, dining services, parking, the Wildcat Shop, and mandatory services and activities fees.
Moody’s is the top credit-rating agency that performs international financial research and analysis on commercial and government agencies. The Moody’s rating is a forecast of the credit-worthiness of an institution, particularly the likelihood that the institution will be able to repay the bonds. It provides such ratings whenever an institution is preparing to issue bonds.
Media contact: Richard Moreno, Director of Content Development, CWU Public Affairs, 509-963-2714, Richard.Moreno@cwu.edu.
—August 10, 2016