University of Virginia
Office of Vice President and Chief Financial Officer
Capital Renewal Program
Summary of Lending Terms and Conditions
Overview: The terms and conditions of capital renewal program loans are set forth below.
Structuring Terms
Interest Rate:
The interest rate will be the University’s blended rate.
Interest Rate Reset:
The blended rate is subject to reset on an annual basis.
Maturity:
20 years.
Principal Amortization:
Principal is structured to provide level annual debt
service payments based on the prevailing blended rate at
the time the loan is initiated.
Payment Frequency:
Debt service payments will be made monthly, based on
1/12th of fiscal year obligation.
Loan Amount
Project Amount:
The amount of project funds loaned will be based upon
the final draw schedule provided at the beginning of
construction.
Capitalized Interest:
The unit/division may request, at the time of the loan
approval and acceptance, interest be capitalized through
the end of construction, at which point the 20-year term
begins. The amount of interest capitalized will be
calculated based on the Loan Amount at the blended rate
during the desired capitalized interest period.
Costs:
The University will assess a 2.0% premium to all loans
to cover costs of issuance.
Construction Fund Earnings:
Investment earnings on the construction fund will be
used to reduce the upfront Loan Amount based on the
draw schedule. The rate of return will be the lower of
the average 91 day T bill discount rate on the last day of
the month prior to the preparation of the Loan
Acceptance and Approval and Loan Amortization or
4.75%. The rate will be applied based on the draw
schedule in effect at the time of the loan acceptance and
approval.
Other Terms
Prepayment Option:
Application of Debt Proceeds:
The bonds can be prepaid at any time, without premium
or penalty.
Debt Proceeds will be applied to the project within 2
days of each month end.
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