Debt Management Resources

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Debt Ratings

Moody's
Aa1, with stable outlook (Moody's Investors Service)
Aa1 rating – The Aa1 rating reflects the University’s excellent brand and strategic positioning derived from its strong student and research market positions combined with ample financial resources.
Stable Outlook – reflects Moody's expectations of favorable student demand, tuition revenue, and sponsored research trends. The outlook also incorporates longer term stable to improving EBIDA margins and debt service coverage.

S&P Global Ratings
On January 22, 2024, S&P Global Ratings (S&P) affirmed the University's "AA" long-term rating with a stable outlook highlighting the University's position as Minnesota's flagship research University and land-grant institution, healthy financial resources, diverse revenue streams, low-to-moderate debt burden, and prodigious fundraising. In addition, S&P affirmed the University's "A-1+" short-term rating reflected by the University's own self-liquidity and credit quality. S&P acknowledges the soft enrollment trends, somewhat weak financial performance, and the uncertainty with its affiliation agreement with Fairview as offsetting factors.
The most recent rating report: S&P Global Ratings - Report dated 1-22-2024

Current Debt Reports/Liquidity

The University provides its own liquidity to support the University's Commercial Paper Facility. This means that the University with support the amount due if any of the commercial paper notes are not remarketed upon maturity. 

The University provides quarterly updates on the University liquidity position and outlines the procedures that the University would following the event of a failed remarketing.

Current Official Statements

This document was created before current policy requirements took effect, and therefore may not be accessible. To request this content in an accessible format, contact [email protected].

Debt Management Support/Oversight

Debt Oversight Group (DOG)

The DOG supports and advises the treasurer and director of debt management in decisions regarding policy development, capital financing strategies, and debt capacity analysis. In addition, the committee periodically reviews the debt management processes to insure compliance with University and tax requirements. Meetings are scheduled monthly. University members in addition to the treasurer and director of debt management include the following individuals:

  • Controller
  • Tax director
  • Accounting director
  • Chief investment officer
  • Associate general counsel
  • Assistant vice president, university services

Debt Process Team (DPT)

The DPT acts as the University's trustee to approve the draws on unspent bond proceeds to reimburse expenditures incurred on eligible projects. In addition, the group establishes and insures that appropriate accounting and compliance procedures are in place and working properly. Meetings are scheduled monthly. The team consists of representatives from applicable departments within the University that have a direct involvement in various aspects of debt management compliance. These departments include:

  • University Services-Finance
  • Treasury Accounting (within the Controller's Office)
  • Treasury Operations (within the Office of Investments and Banking)
  • University Tax Management

Debt Management Advisory Committee (DMAC)

The Debt Management Advisory Committee (the "Committee") advises the Finance Committee of the Board of Regents and the University's treasurer on the issuance and ongoing management of debt. In doing so, the Committee evaluates, recommends, and monitors debt management policies, strategies, and guidelines and provides advice on their implementation so as to best serve the financial objectives of the University of Minnesota. A regent who is a member of the Finance Committee chairs the Advisory Committee. The president appoints the remaining members who consist of:

  • The treasurer of the University;
  • A faculty member of the Carlson School of Management whose area of expertise is relevant to the work of the committee; and
  • Up to six members of the local business community with relevant professional training and experience.

Debt Management Advisory Committee Bylaws
Revised 2016-June 1

Section I. Mission Statement

The Debt Management Advisory Committee (the “Committee”) shall advise the Finance
Committee of the Board of Regents and the University’s Treasurer on the issuance and ongoing
management of debt. In doing so the Committee will evaluate, recommend, and monitor debt
management policies, strategies, and guidelines and provide advice on their implementation so as
to best serve the financial objectives of the University.

Section II. Appointments

Subd. 1. Membership. The Chair or Vice Chair of the Finance Committee of the Board of Regents, or a designee who is a member of the Finance Committee, will chair the Committee. The President shall appoint the remaining members of the Committee, who shall consist of:

  • The Treasurer of the University;
  • A faculty member of the Carlson School of Management whose area of expertise is
  • relevant to the work of the committee;
  • Up to six members of the local business community with relevant professional training and experience.

The Treasurer shall recommend to the President persons for membership on the Committee.

Subd. 2. Membership Terms. The terms of the Regent and Treasurer members are for the
period of time for which the members hold the relevant positions. The remaining members shall
hold staggered terms of four years with a maximum of three terms each. The President may remove
any member when in the judgment of the President removal is appropriate for any reason.

Subd. 3. Concurrent Membership. Except for the Treasurer, no member shall sit
concurrently on the Investment Advisory Committee.

Subd 4. Vacancies. Vacancies on the committee shall be filled by Presidential appointment
upon the recommendation of the Treasurer.

Section III. Compensation.

Members of the Committee serve without compensation. The Office of the Treasurer will
reimburse parking and mileage expenses according to procedures established by that office.

Section IV. Responsibilities.

The Committee’s responsibilities will include the review, discussion, and evaluation of
recommendations presented by the Treasurer related to the issuance and management of
university debt, including the following:

  1. Debt management policies and objectives;
  2. Strategies to achieve objectives;
  3. Proposed debt structures;
  4. Strategies for managing interest rate risk; and
  5. The request for proposals process for the issuance of new debt and the selection of underwriters and other service providers pursuant to that process.

The Treasurer shall provide a summary of the Committee discussions to the Finance
Committee of the Board of Regents.

Section V. Meeting Procedures.

Subd. 1. Meeting Schedule. The Committee shall meet a minimum of two times per year
based on a an annual schedule established by the members of the Committee. The meetings should
be scheduled as appropriate to provide the greatest benefit from the advice of the Committee in
addressing issues related to financing of University capital projects.

Debt Policies and Procedures

These documents were created before current policy requirements took effect, and therefore may not be accessible. To request this content in an accessible format, contact [email protected].

Archived Debt Ratings

2021

2020

2019

2018

2017

Archived Official Statements

Archived Debt Reports/Liquidity

Liquidity Letters

Liquidity Support

University Debt - Flow of Funds

Receipt and Spending of Proceeds

  • University debt is sold in the capital markets to investors.
  • Debt proceeds are received by the University and invested by the Office of Investments and Banking (OIB) prior to being spent on University capital projects.
  • Most universities use an outside trustee who authorizes the draws on the proceeds for the capital projects. The University’s Debt Process Team acts as the University’s trustee.

Internal Funding and Repayment of Debt

  • University colleges, auxiliary units, and administrative units benefit from the capital projects and are charged debt service (principal and interest) for the use of debt on space that they occupy.
  • The debt service charges are collected centrally and considered University equity.
  • University equity is used to fund the principal and interest payments due to the bondholders.

Phase I: Pre Issuance

the initial planning for a future debt issuance.

Illustration of financial data analysis showing a pie chart, a bar graph with an upward trend, and dollar coins, symbolizing economic growth and reporting.
Illustration of documents and a security shield with a padlock, a percentage symbol, and charts, representing secure financial or data transactions and reporting.
Illustration of a hand using a pen to fill out a digital form or spreadsheet on a tablet, with dollar coins in the background, representing financial input or budgeting.
Illustration of a hand pointing to an approved document with a checkmark, surrounded by a stamp and data sheets, symbolizing validation, approval, or official certification.

Phase II: Issuance

Illustration of coins and upward arrows surrounded by user icons in a circle, representing financial growth through community or team collaboration.

Phase III: Post Issuance Compliance

The individuals from different University units that are members of the Debt Process Team work together to act as the University’s trustee to approve draw requests and to oversee compliance after the debt is issued.

Illustration of charts, a checklist, and a government building with a dollar symbol and arrow, representing financial planning, reporting, and institutional funding.
Illustration of a calendar, clock, and progress timeline between two user icons, symbolizing project scheduling, time management, and collaboration.
Illustration of a hand holding a magnifying glass over bar and pie charts, representing data analysis, financial performance, and insights tracking.
Illustration of stacked coins, a dollar symbol, a percentage sign, and an upward trending line graph, representing financial growth, investment, and interest rates.
Illustration of a computer screen with rising bar chart, surrounded by financial icons like charts, calculator, and dollar signs.