Case Study:Stevenson University

100 Campus Circle Owings Mills, MD, 21117-7804

Founded in 1947 as Villa Julie College, Stevenson University is a four-year private, liberal arts college currently located on three campuses in the northern suburbs of Baltimore, Maryland. At the time of its financing, the University served approximately 4,400 students pursuing bachelor’s and master’s degrees and had an operating budget of approximately $123 million (including capital expenditures). Stevenson University has the third largest undergraduate enrollment of independent colleges in Maryland behind John Hopkins University and Loyola University of Maryland.

Project Overview

Wye River Group served as financial advisor to Stevenson in 2013 for a complex, multi-series, multi-lender $147.7 million bond financing that refinanced the University’s outstanding variable rate demand bonds ($132.4 million) and outstanding taxable term loan ($4.7 million) into a new issue of tax-exempt “non-bank qualified” bonds; and, financed an additional $10 million of new on-campus capital projects.

Financing Overview

The financing enabled the University to (1) secure a fixed cost of capital for 10 years on all but $15.1 million of “new money” for capital projects (which the University elected to keep in a variable rate draw down mode), (2) refinance a taxable term loan, (3) extend the amortization of outstanding debt to 30 years, (4) reduce its annual debt service burden from $9.3 million to approximately $8.5 million, (5) consolidate and restructure existing interest rate swaps to provide a uniform hedge position, (6) eliminate overly-restrictive financial covenants, (7) permit parity financing of future capital projects, and (8) craft a Master Loan Agreement to provide the framework for, and basic financial covenants applicable to, all future debt financing of the University.

Wye River Group’s Role

Wye River had the privilege to work closely with the University on its financing. More specifically, our services included:

  • Providing the structural framework for the multi-faceted transaction
  • Conducting a competitive solicitation culminating in the selection of the lowest cost lenders
  • Negotiating key terms of the financing with the selected provider
  • Providing all financial analyses and covenant tests and served as the liaison between the University, the working group and three lending institutions
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