Treasury Team Heads to NYC for Bond Issuance

Cindy Corridore, assistant treasurer, and Josh Wicks, senior treasury analyst, were in New York City earlier this month for the university’s $465 million bond issuance. The bonds will be used for a variety of capital projects, including the new Biological Science Building, Athletics South, and Brighton Health Center South, as well as to refinance Metro Health’s bonds and certain outstanding bonds of the university for savings.

A bond is essentially a loan between an investor and an organization. The investor agrees to give the organization money in exchange for interest payments over a specified time period.

The university’s bond pricing took place at the Morgan Stanley Building in Times Square. “There were approximately 70 active investors interested in portions of our bonds during the investor order period, which was about 90 minutes long.” said Cindy. “Even with the market being very volatile after the election, we were five times oversubscribed, meaning we had five investors bidding for every one of our bonds.”

Times SquareSince our bonds were met with such strong demand—in large part due to our high ratings from S&P Global Ratings (AAA) and Moody’s Investors Service (Aaa), a testament to the university’s exceptional financial and enterprise strength—Morgan Stanley promoted the university on its scrolling, digital billboards after the pricing. “We didn’t know they were going to have us on their marquee,” said Josh. “We walked outside, turned around, and there it was! We were beyond excited. We loved seeing the maize and blue in New York City, and what a cool thing to say something you worked on was displayed on a marquee in Times Square!”

In the photo, Cindy and Josh are in Times Square, just one block from where the ball drops each New Year’s Eve, with “University of Michigan—Go Blue! Hail to the Victors!” prominently displayed on Morgan Stanley’s digital billboards. “Our partners from Morgan Stanley took the photo for us. There were tons of people on the sidewalks! We practically had to stand in the street to get a good photo, and even then, we had a deliberate photo bomber in one of our takes!” Cindy said.

The university typically issues bonds every one to two years, depending on needs. The entire process takes a few months and involves numerous attorneys, investors, banks, and rating agencies. Presently, the university has around $2 billion in outstanding bonds for various projects.

To learn more about the university’s financial strength, check out U-M’s FY 2016 Annual Report.

(From Finance Communications)