The Eastern Michigan University Board of Regents granted
authority to EMU President Susan Martin to refund bonds
and borrow new money to help finance several projects on
campus.
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GROUND SWELL: A bulldozer conducts excavation
work behind Mark Jefferson earlier this month.
Renovation of Mark Jefferson as part of an overall
$90 million science complex
project is in its early
stages. At its April 21 meeting,
the Board of Regents
granted EMU President Susan
Martin authorization to
refund bonds and borrow new
money to help finance
this and other construction
projects on campus. |
The decision was made at the Board's April 21 meeting.
"This allows the University to lower the interest rates
we are currently paying on our existing debt and provides
the ability to borrow additional funds for the new science
complex and other needed improvements to campus facilities," said
John Lumm, interim chief financial officer for EMU.
The board authorized the University to borrow up to $125
million that will be used for construction, expansion and/or
improvements to campus facilities.
The authority given to Martin to refund EMU's bonds will
allow the University to switch its letter of credit from
Dexia Credit Local to JPMorgan Chase Bank. Dexia's national
credit ratings have been reduced, causing a significant
increase in interest rates payable on those bonds.
During the Regents' Finance and Audit Committee, Lumm
explained that when EMU secured its letter of credit from
Dexia, it was a sound fiscal decision at the time.
"Unfortunately, Dexia Bank was a casualty of the
financial crisis," Lumm said. "As a result, Dexia's
credit was downgraded."
Replacing the Dexia letter of credit with one from JPMorgan
Chase Bank will result in an interest rate savings of $2
million annually for the University, Lumm said.
"This is a critical component to our financial future,"
said Regent James Stapleton.
We just keep getting closer and closer to funding
Mark Jefferson and Pray-Harrold," Regent Chair
Roy Wilbanks said during the Board meeting. "This is a
great day for EMU. I don't know if people realize that
or not." — Ron
Podell contributed to this report.
