About Strategic Debt Management

The University issues bonds on an as needed basis for those projects that have been designated and given authority through the capital budgeting process. Campus units that wish to borrow for capital projects work with the Facilities and Budget offices along with the Director, Strategic Debt Management to determine the amount and timing of the project, along with confirming the ability to repay the amount borrowed.

Planning for capital debt starts years in advance of the actual construction and/or acquisition. Campus units with capital plans, should contact the Director, Strategic Debt Management as far in advance as possible to discuss timing, approvals needed and financial viability of the project.

The timing and structure of a bond issue is determined based on a number of variables such as; the timing of cash needs, current market rates, and overall mix of University debt. After the bonds are issued, there is ongoing oversight of proceeds distribution, arbitrage rebate calculation, covenant compliance and repayment activities. The debt portfolio is continually reviewed for possible cost savings using repayment, refunding or other activities.

Currently, the University has a mix of tax exempt and taxable bonds with rates that are fixed, synthetically fixed and variable. The University is also part of a $500 million Commercial Paper program with the University of North Carolina at Chapel Hill. NC State’s portion of that program is $100 million. As part of its overall debt strategy, the University is party to several interest rate swaps. These swaps synthetically fix the interest rate on a portion of the outstanding variable rate issues.

The University has adopted a central loan program under which it provides funding for projects under the guidance of the Vice Chancellor for Finance and Administration and the University Treasurer.  Application form and additional information can be found here.

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