By SUSAN JONES
The Board of Trustees Finance and Budget committee approved three resolutions on Sept. 17 that will allow the University to issue bonds and other short-term debt instruments to finance capital projects and other needs.
The resolutions included:
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Issuance of bonds not to exceed $200 million.
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Continue the Pitt PANTHERS (Pitt Asset Notes — Tax-Exempt Higher Education Registered Series) program, which allows the University to issue short-term tax-exempt notes up to $600 million. The University currently has approximately $400 million in debt outstanding in this program.
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Establish a commercial paper program to provide additional financial flexibility.
The bonds will support the University’s capital budget for the current fiscal year, which is $256 million. It emphasizes preserving and maintaining Pitt’s existing campus infrastructure, a Pitt spokesperson said, and completing construction projects already in progress. Those efforts include buildings, classrooms and housing, as well as infrastructure improvements that support sustainability.
Treasurer Paul Lawrence told the committee that the University has been issuing short-term, tax-exempt notes under the PANTHERS program since 1999. The approved resolution re-establishes the most recent October 2019 authorization of the program.
Commercial paper is a short-term debt instrument used to finance immediate operational needs. Typically maturing within 270 days, it is not backed by collateral. Instead, it relies on the issuer’s creditworthiness.
“A commercial paper program will allow the University to quickly access the debt market in the face of uncertainty,” Lawrence said. “This additional financial flexibility will be achieved in a very cost effective manner.”
The University currently manages $46 million of bonds in commercial paper programs, which will roll into new program.
In response to a question from Board of Trustees Chair John Verbanac, Lawrence said that he doesn’t expect these three actions to have any impact on Pitt’s credit ratings.
“This issuance is routine and consistent with previous debt issuances,” the University spokesperson said, “reflecting the University’s commitment to maintaining healthy financial liquidity while ensuring Pitt has the necessary resources to fund approved capital projects.”
For comparison, Pitt’s 2023 debt issuance was $275 million compared to the current planned issuance of $200 million.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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