Pursuant to Connecticut General Statute Sec. 10a-109x the Semiannual Report to the General Assembly is to provide, among other things, information on the number of projects and securities authorized, approved and issued; the payment of debt service requirements, and the payment of principal and interest on the UCONN 2000 securities; and the amount of investment earnings. This section provides that information.
University of Connecticut General Obligation Bonds Secured by the State’s Debt Service Commitment - Bond Issues Completed
Section 10a-109 of the Connecticut General Statutes empowers the University to issue General Obligation Bonds secured by the State’s Debt Service Commitment (sometimes referred to as “General Obligation Debt Service Commitment Bonds” or “GO-DSC Bonds”). These Bonds are issued pursuant to the General Obligation Master Indenture of Trust, dated as of November 1, 1995, between the University of Connecticut, as Issuer, and Fleet National Bank of Connecticut as Trustee (now U.S. Bank N.A.). The University’s Board of Trustees on November 10, 1995, and the State Bond Commission approved the Master Indenture of Trust on December 21, 1995. UConn’s Board of Trustees and the Governor approve the subsequent Supplemental Indentures for each bond issue. The University and Office of the State Treasurer, working in conjunction, manage the Debt Service Commitment Bond sale process.
Pursuant to Connecticut General Statute Sec. 10a-109x the University General Obligation Debt Service Commitment Bonds authorized, approved and issued to date are listed below:
A.) G.O. Bonds: Project Fund
Date of Issue
Par Amount
TIC(1)
General Obligation Bond Issue
Phase I
February 21, 1996
$83,929,714.85
4.94%
1996 Series A
April 24, 1997
$124,392,431.65
5.48%
1997 Series A
June 24, 1998
$99,520,000.00
4.78%
1998 Series A
April 8, 1999
$79,735,000.00
4.46%
1999 Series A
Phase II
March 29, 2000
$130,850,000.00
5.42%
2000 Series A
April 11, 2001
$100,000,000.00
4.54%
2001 Series A
April 18, 2002
$100,000,000.00
4.74%
2002 Series A(2)
March 26, 2003
$96,210,000.00
3.97%
2003 Series A(3)
January 22, 2004
$97,845,000.00
3.76%
2004 Series A(4)
March 16, 2005 (includes PhaseIII)
$98,110,000.00
4.20%
2005 Series A(5)
Sub-Total Phase I, II & III: $1,010,592,146.50
B.) Refunding G.O. Bonds
January 29, 2004
$216,950,000.00
3.55%
2004 Series A Refunding(4)
NOTE:
(1) TIC is the true interest cost reflecting the interest rate for the time value of money across an entire bond issue.
(2) The GO-DSC 2002A bonds provided $994,688.03 directly to the Office of the State Treasurer.
(3) The GO-DSC 2003 bonds par amount of $96,210,000 plus $3,790,000.00 of original issue premium, totaled $100,000,000 available
for Projects.
(4)The GO-DSC
2004A New Money and GO-DSC 2004A Refunding Bonds were issued under a single
Official Statement. The GO-DSC 2004 new money bonds totaled $100,000,000 for
projects, funded by the $97,845,000 par amount plus $2,155,000 of the original
issue premium.
(5) The GO-DSC 2005 bonds totaled $100,000,000 available for projects funded by the $98,110,000 par amount plus
$1,890,000 of the original issue premium. Phase II authorizations accounted for $50 million and Phase III
for $50 million.
The ten series of
UConn General Obligation DSC bonds issued to fund projects total
$1,010,592,146.50 in face value and provided $1,012,000,000 for UCONN 2000
project spending. (Excluding the $216,950,000 UConn General Obligation DSC
Refunding Bonds Series 2004A issued to refund $223,160,000 of prior bonds.) The
remaining balance, together with accrued interest and net original issue
premium, funded the costs of issuance and deposits to the State Treasurer.
On March 16, 2005 the University issued $98,110,000 face amount of the
University of Connecticut General Obligation Debt Service Commitment Bonds 2005
Series A, at a true interest cost of 4.20%, with a 10.3 Year Average Life and
with favorable call redemption terms of 2015 @ Par. Selected maturities on and
after February 15, 2011 carried FSA bond insurance.
In addition on April 12, 2005 the Board of Trustees approved the Twelfth
Supplemental General Obligation Indenture which was submitted to the Office of
the Governor on June 22, 2005 and deemed approved, pursuant to the Act, 30 days
later. During fiscal year 2006 the University plans to issue the eleventh series
of UConn General Obligation DSC bonds for up to $79,000,000.00 for UCONN2000
projects, as authorized by the Twelfth Supplemental Indenture, as follows:
Intramural, Recreational and Intercollegiate Facilities
$18,100,000.00
Law School Renovations/Improvements
$500,000.00
School of Pharmacy/Biology Completion
$6,000,000.00
Stamford Campus Improvements
$250,000.00
Student Union Addidtion
$11,000,000.00
West Hartford Campus Renovations/Improvements
$250,000.00
Sub-Total -- Storrs and Regional Campus Project List
$52,900,000.00
Health Center
Deferred Maintenance/Code/ADA Renovation Sum - Health Center
$3,000,000.00
Dental School Renovation
$330,000.00
Equipment, Library Collections and Telecommunications - Health Center
$7,580,000.00
Medical School Academic Building Renovation
$1,190,000.00
Research Tower
$14,000,000.00
Sub-Total -- Health Center Project List
$26,100,000.00
Total:
$79,000,000.00
UCONN 2000 Phase III - Financing Initiated
The GO-DSC2005A
bond issue completed the $962,000,000 of Phase I and Phase II of UCONN 2000
project authorizations under the original UCONN 2000 Act that may be secured
with the State’s Debt Service Commitment. The GO-DSC2005A $100 million
represented the last $50 million of Phase II and the initial $50 million of
Phase III UCONN 2000 project authorizations.
UCONN 2000 General Obligation Debt Service Commitment Bonded Projects
To date,
seventy-three projects, totaling $1,091,000,000 have been authorized to receive
General Obligation Debt Service Commitment bond proceeds, as follows:
UCONN2000 GENERAL OBLIGATION BONDS SECURED BY THE DEBT
SERVICE COMMITMENT OF THE STATE
Project-Name
General Obligation Supplemental Indenture Authorizations
Phase I & II
Agricultural Biotechnology Facility Completion
$3,000,000.00
Agricultural Biotechnology Facility
$9,400,000.00
Alumni Quadrant Renovations
$11,500,000.00
Avery Point Marine Science Research Center-Phase I
$30,000,000.00
Avery Point Marine Science Research Center-Phase II
$7,341,000.00
Avery Point Renovation
$5,323,000.00
Benton State Art Museum Addition
$700,000.00
Business School Renovation-Phase II
$8,000,000.00
Central Warehouse New
*
$6,933,751.77
Chemistry Building
$53,062,000.00
Deferred Maintenance & Renovation Lump Sum-Phase I
$40,792,000.00
Deferred Maintenance & Renovation Lump Sum Balance-Phase II
$117,805,360.13
East Campus North Renovations
$7,710,000.00
Equipment, Library Collections & Telecommunications-Phase I
$60,500,000.00
Equipment, Library Collections & Telecommunications Completion-Phase II
$105,812,000.00
Gant Plaza Deck
$7,287,174.10
Gentry Renovation-Option B
$10,000,000.00
Grad Dorm Renovations
$3,000,000.00
Heating Plant Upgrade
$9,969,000.00
Hilltop Dormitory Renovations
$8,700,000.00
Ice Rink Enclosure
$3,280,000.00
International House Conversion/(Museum of Natural History)
Intramural, Recreational and Intercollegiate Facilities
$22,800,000.00
Lakeside Renovation
$3,800,000.00
Law School Renovations/Improvements
$1,000,000.00
Natural History Museum Completion
$500,000.00
North Hillside Road Completion
$1,000,000.00
Residential Life Facilities
$750,000.00
School of Pharmacy/Biology Completion
$6,000,000.00
Stamford Campus Improvements
$500,000.00
Student Union Addition
$11,000,000.00
Torrey Renovation Completion and Biology Expansion
$1,000,000.00
West Hartford Campus Renovations/Improvements
$500,000.00
Total Storrs and Regional Campus Projects:
$86,510,000.00
Phase III: Health Center
CLAC Renovation Biosafety Level 3 Lab
$30,000.00
Deferred Maintenance/Code/ADA Renovation Sum - Health Center
$5,850,000.00
Dental School Renovation
$500,000.00
Equipment, Library Collections and Telecommunications - Health Center
$15,480,000.00
Library/Student Computer Center Renovation
$150,000.00
Main Building Renovation
$75,000.00
Medical School Academic Building Renovation
$3,400,000.00
Research Tower
$17,005,000.00
Total Health Center Projects:
$42,490,000.00
Total Phase III Projects:
$129,000,000.00
Total Phase I, II, & III Projects:
$1,091,000,000.00
NOTE: *Board of Trustees Added Project 2/22/2001
(Pre-UCONN
2000 Bond Authorization)
University Refunding Provides Debt Service Savings to State
UConn achieved
$15.2 million in debt service savings for Connecticut taxpayers, on January 29,
2004 when the University closed on $216,950,000.00 of UCONN 2000 General
Obligation DSC Refunding Bonds Series 2004-A. Institutions garnered most of the
bonds. Proceeds pre-refunded $223,160,000 of the portions of the 1996, 1997,
1998, 2000, 2001, and 2002 UCONN 2000 General Obligation Debt Service Commitment
Bonds. Debt Service savings amounted to $15,215,582.84 million on a gross cash
debt service savings basis, or $10,117,718.77 on a net present value basis
(4.53% savings of refunded bonds), spread across fiscal years 2004 to 2020.
These are real dollar savings for Connecticut taxpayers.
University’s Financial Statements
The University’s
financial statements reflect the UCONN 2000 program. The General Obligation and
Special Obligation bonds and other debt are shown as liabilities on the
University’s financial statements. The financed UCONN 2000 projects and any
unspent debt proceeds are shown as assets. The State’s Debt Service Commitment
to pay for the University’s General Obligation Bonds is also shown as an asset
on the University’s financial statements.
Trustee Bank
The proceeds of
the sale by the University of any bonds are part of the Trust Estate established
under the General Obligation Master Indenture of Trust with the Trustee Bank as
security for bondholders. Consequently, the University holds all of the bond
proceeds at the Trustee Bank, with this exception: the Costs of Issuance account
funded by the University’s General Obligation Bonds Debt Service Commitment
bonds may be held and invested by the State Treasurer’s Office in a segregated
account. The Special Obligation Master Indenture has similar Trust Estate
provisions. The Trustee Bank holds all of the Special Obligation bond proceeds
received at issuance including the Costs of Issuance account.
Prior to June 1998, all University General Obligation Debt Service Commitment
Bond proceeds were deposited with the Office of the State Treasurer and treated
like State bond proceeds, including payments made to vendors through the Office
of the State Comptroller. Subsequently, the Office of the Attorney General
opined that the University, and not the State, issues UCONN 2000 bonds.
Accordingly, upon advice of bond counsel and in conformity with the Master
Indenture of Trust, Debt Service Commitment Bond construction fund proceeds were
deposited to the Trustee Bank and disbursed as directed by the University
pursuant to the Indenture. Per the State’s preference, the University General
Obligation Debt Service Commitment Bond proceeds for costs of issuance are still
treated like State bond proceeds and deposited with the Office of the State
Treasurer and disbursed through the Office of the State Comptroller.
The Indentures of Trust provide that the University is authorized and directed
to order each disbursement from the Construction Account held by the Trustee
upon a certification filed with the Trustee bank and, in the case of the Debt
Service Commitment bonds, the State Treasurer. The Indentures provide that such
certification shall be signed by an Authorized Officer of the University and
include certain disbursement information. Once the Authorized Officer
certification filings are made, the University can directly disburse payments.
University Special Obligation Revenue Bonds Secured by Pledged Revenues
UCONN 2000 also authorizes the University to issue Special Obligation Revenue bonds. Unlike the University’s General Obligation Debt Service Commitment Bonds that
are paid from the State's General Fund, debt on the Special Obligation Bonds is paid from certain Pledged Revenues of the University as defined in the particular
bond series indenture.
A Special Capital Reserve Fund may be established for University Special Obligation bond issues only if the Board of Trustees determines that the Special
Obligation bond issue is self-sufficient as defined in the Act. The self-sufficiency finding by the University must be submitted to and confirmed as not
unreasonable or arbitrary by the State Treasurer prior to issuance of the bonds. Once approved, the Special Capital Reserve Fund is funded at issuance by
the University to meet the minimum capital reserve requirement. However, subject to notification by the University on or before December 1, annually, if
this amount falls below the required minimum capital reserve, there is deemed to be appropriated from the state General Fund, sums necessary to restore each
such Special Capital Reserve Fund to the required minimum capital reserve.
Special Obligation Student Fee Revenue Bond Issues
Student Fee Revenue Bonds have been issued pursuant to the Special Obligation
Indenture of Trust, dated as of January 1, 1997, between the University as
Issuer and U.S. Bank N.A. as successor to State Street Bank & Trust as Trustee
(“the Special Obligation Master Indenture”). The Board of Trustees approved the
Master Indenture on November 8, 1996.
UConn’s Board of Trustees and the Governor approve the subsequent Supplemental
Indentures for each Special Obligation bond issue. The University and Office of
the State Treasurer, working in conjunction, manage the Special Obligation Bond
sale process. University Special Obligation Student Fee Revenue Bonds issued to
date are summarized below:
Date of Issue
Par Amount
TIC(1)
Special Obligation Student Fee
Revenue Bond Issue
February 4, 1998
$33,560,000.00
5.08%
1998 Series A
June 1, 2000
$89,570,000.00
6.02%
2000 Series A(2)
February 14, 2002
$75,430,000.00
4.94%
New Money 2002 Series A
February 27, 2002
$96,130,000.00
4.89%
Refunding 2002 Series A
NOTE:
(1) TIC is the true interest cost reflecting the interest rate for the time value of money across an entire bond issue. The University Special Obligation
Bonds are generally issued for an approximate 30-year final maturity, compared to a 20-year final maturity for the General Obligation DSC Bonds; hence the
TIC may appear relatively higher for Special Obligation Bonds.
(2) The Series 2000-A bonds were refunded on Feb. 27, 2002.
On February 4, 1998, the University issued $33,560,000 of University of Connecticut Student Fee Revenue Bonds 1998 Series A ("SFR 1998-A Bonds")
with a final maturity of November 15, 2027. The Special Obligation First Supplemental Indenture was also dated January 1, 1997 and authorized the
issuance of bonds up to a principal amount not to exceed $30,000,000 for construction of the South Campus Residence and Dining Hall, plus amounts
necessary to fund a Special Capital Reserve Fund ("SCRF") and provide for costs of issuance. The University managed the issuance and sale of these
bonds and realized a favorable true interest cost over the term. Debt service for these bonds is paid from the student Infrastructure Maintenance
Fee instituted in 1997 and other Pledged Revenues as further defined in the Indenture of Trust. Such Pledged Revenues also help support future
operation and maintenance costs for facilities built or expanded through UCONN 2000.
On June 1, 2000, the University issued $89,570,000 of the University of Connecticut Student Fee Revenue Bonds 2000 Series A ("SFR 2000-A")
pursuant to the Special Obligation Master Indenture, and the Special Obligation Student Fee Revenue Bonds Second Supplemental Indenture dated as
of May 1, 2000. Bond proceeds funded $87,000,000 of construction for the Hilltop Dormitory, Hilltop Student Rental Apartments, and Parking Garage
South and also provided for capitalized interest and costs of issuance. The $89,570,000 SFR 2000 Bonds were defeased in substance on February 27,
2002, as further described below, and are no longer reflected as outstanding debt on the University's financial statements.
On February 14, 2002, the University issued $75,430,000 of the University of Connecticut Student Fee Revenue Bonds 2002 Series A pursuant
to the Special Obligation Master Indenture and the Special Obligation Student Fee Revenue Bonds Fourth Supplemental Indenture, dated as of
November 16, 2001. Bond proceeds funded $72,180,000 of construction for the Alumni Quadrant Renovations, Shippee/Buckley Renovations, East Campus
North Renovations, Towers Renovations (including Greek Housing), and North Campus Renovations (including North Campus Student Suites and Apartments).
On February 27, 2002, the University issued $96,130,000 of the University of Connecticut Student Fee Revenue Bonds 2002 Refunding Series A
pursuant to the Special Obligation Master Indenture and the Special Obligation Student Fee Revenue Bonds Third Supplemental Indenture, dated as
of February 1, 2002. Bond proceeds were used to take advantage of favorable market conditions to advance refund and defease in substance all of
the $89,570,000 of Student Fee Revenue Bonds 2000 Series A bonds outstanding. Proceeds were deposited with the Trustee bank in an irrevocable
escrow fund sufficient to satisfy future debt service and call premiums on the prior issue.
UCONN2000 Special Obligation Student Fee Revenue Projects
To date, nine
projects have been authorized to receive $189,180,000 of the University’s
Special Obligation Student Fee Revenue bond proceeds. Some of these projects
were also supported by General Obligation or other funding, as follows:
UCONN2000 SPECIAL OBLIGATION STUDENT FEE REVENUE BOND PROCEEDS FUNDED PROJECTS
Project Name
Authorized and Issued
Alumni Quadrant Renovations*
$7,000,000
East Campus North Renovations*
$1,000,000
Hilltop Dormitory New
$21,000,000
Hilltop Student Rental Apartments
$42,000,000
North Campus Renovation (including North Campus Student
Suites and Apartments)*
$45,000,000
Parking Garage-South*
$24,000,000
Shippee/Buckley Renovations
$5,000,000
South Campus Complex
$30,000,000
Towers Renovations (including Greek Housing)*
$14,180,000
Total:
$189,180,000
NOTE: *Also partially funded with proceeds of the University's General Obligation bonds.
To date, the UCONN 2000 Heating Plant Upgrade project has also been authorized
to receive $81,900,000 of tax-exempt lease purchase funding secured by the
University’s general obligation.
On December 18,
2003 the University entered into a privately placed $75,000,000 Governmental
Tax-Exempt Lease Purchase Agreement with a reported nominal interest rate of
4.420% compounded monthly to finance the design and construction of a combined
heat and power plant. On August 15, 2005 the University amended the agreement
for an additional borrowing of up to $6,900,000 at a 5.09% interest rate
compounded monthly. The financing is part of the UCONN 2000 Heating Plant
Upgrade project, as defined under the UCONN 2000 Act, and is expected to
generate substantially all of the needs for electrical power, heating and
cooling on the main campus at Storrs. This tax-exempt lease purchase financing
was not issued under the UCONN 2000 General Obligation or Special Obligation
Indentures of Trust but was entered into under certain separately negotiated
documents and agreements. Nonetheless, it is considered a $81,900,000 debt
issuance of the University falling under UCONN 2000. The Heating Plant Upgrade
has also been partially funded with UCONN 2000 General Obligation DSC bonds as
listed above.
The lease is not rated by the credit rating agencies, but weighs in their credit rating of the University's bond programs.
