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W W W. M A I N E B I Z . B I Z 23 A P R I L 1 8 , 2 0 1 6 limits don't exist, and we're going in at about the same interest rate that we would for nontaxable." To pay back the principle at the 40-year mark, in 2055, the college has set up a "sinking fund" — an internal investment account within the endow- ment — to collect $6 million set aside from the normal operating budget over the next fi ve to six years, then left alone to accrue to $100 million. "At that time, the board of trustees and administration might decide to reconfi gure the debt, but we wanted to be in a position where we provide for our successors to have the resources to repay it," Terp says. Payment of the yearly, fi xed $4.25 million in interest is also built into the college's regular operating budget. For now, the $100 million is set aside in short-term treasuries, whose yield helps cover interest. Debt nancing on upswing Increased levels of debt fi nancing has been on something of an upswing among a certain segment of colleges and universities that are well-resourced, with healthy balance sheets, an active alumni base, strong philanthropic support and investment-grade credit ratings, says Bob Shea, a senior fellow in fi nance and cam- pus management for Washington, D.C.- based National Association of College and University Business Offi cers. " e well-resourced schools are doing exactly that," Shea says. " ere are colleges and universities that aren't very well resourced and cannot access the debt capital markets because of the thin- ness of their margins and operations." ose schools, he says, tend to be wholly tuition-dependent, lacking endowments, unable to raise much money, and unable to take on debt that adds to their annual expenses. " e issue on the lower end of the bond rating scale is whether colleges have the capacity to take on debt and the ability to pay it back. Ultimately, the only people who can answer that ques- tion with any specifi city is the leader- ship team of those organizations and their boards, and establishing a debt policy is a central responsibility of an organization's board. But it's obviously not a question with Colby. ey're on the upper end of the spectrum." At Colby, the bond money approxi- mately doubles the debt load; previous debt, also through bond issues, paid for previous construction projects. At the time Colby took on the additional debt, in January 2015, Standard & Poor's THE VALUE OF A BUCK. OF A BUCK. You understand the value of a dollar. Early mornings. Late nights. Tenacity, wit, and a work ethic that means you never quit, you never settle. Neither do we. Our team honors your lifelong effort with the same level of dedication — and the same work ethic — that it took to realize your dreams. First Advisors PERFORMANCE YOU CAN TRUST First Advisors Investment Management. Retirement Planning. Trust Services | firstadvisorsonline.com | 866-563-1900 PROTECTING DREAMS | Securities and investment products are not bank deposits, are not insured by the FDIC or any other government agency, are not obligations of, nor guaranteed by, any bank or bank affiliate, and may involve investment risk, including the possible loss of value or principal amount invested. Environmental Due Dilligence Is At Our Core Contact Nick Sabatine Contact Nick Sabatine at the idea-stage: at the idea-stage: nsabatine@ransomenv.com 207-772-2891 D E V E L O P M E N T D E V E L O P M E N T \ \ D U E D I L I G E N C E D U E D I L I G E N C E \ \ E N V I R O N M E N TA L H E A LT H & S A F E T Y E N V I R O N M E N TA L H E A LT H & S A F E T Y E N V I R O N M E N TA L H E A LT H & S A F E T Y \ \ M U N I C I P A L \ \ U T I L I T Y, E N E R G Y & M A N U F A C T U R I N G Due Diligence Due Diligence Wastewater Engineering Wastewater Engineering Storm Water Engineering Storm Water Engineering Permitting Permitting Water Supply Engineering Water Supply Engineering GIS Applications GIS Applications Turnkey Brownfield Service Turnkey Brownfield Service Turnkey Brownfield Service Remediation Remediation Funding Assistance Funding Assistance Consulting Engineers and Scientists www.RansomEnv.com C O N T I N U E D O N F O L L OW I N G PA G E »

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