Ohio State’s innovative strategy named Bond Buyer Midwest Deal of the Year
COLUMBUS, Ohio – The Ohio State University’s innovative strategy for issuing municipal bonds has been named Bond Buyer’s Midwest Deal of the Year, representing the second time in five years the influential financial publication has praised the university.
“We are proud of this honor, which reflects our commitment to support teaching, learning and research through innovative financial strategies,” said Geoff Chatas, senior vice president for business and finance and CFO. “By employing a tactic that is novel within the municipal bond market, we were able to borrow funds on the best possible terms for the university.”
The award recognizes the university’s use of a “shelf”-like registration process to gain enhanced flexibility over the timing and structure of future bond issuance. While this structure is fairly common in the corporate world, it is rarely seen in the municipal bond market.
In a video announcing the award, Bond Buyer said Ohio State’s “innovative initiative” allows the university to move quickly “to take advantage of favorable conditions.”
A “shelf”-like process involves obtaining upfront approvals from all relevant parties and issuing a base offering statement that streamlines the steps to issue a series of bonds over time.
In Ohio State’s case, the university established the ability to issue up to $1 billion in bonds over a 16-month period. The first issues from this innovative approach occurred in March, when Ohio State issued $600 million in new taxable bonds and another $30 million in tax-exempt bonds to refinance a 2005 series.
“This process made us more nimble in accessing the market,” said Chatas. “I applaud Mike Papadakis and his team at the university treasurer’s office for this historic achievement.”
By winning the Midwest Deal of the Year, Ohio State will be in the running for Bond Buyer’s national Deal of the Year award, to be awarded Dec. 1 in New York.
Ohio State last won recognition from Bond Buyer in 2012 for a 50-year lease of the university’s parking operations, which was honored in the nontraditional financing category. In that transaction, the university received an upfront $483 million payment that was invested in the university’s Long Term Investment Pool to generate ongoing support for university priorities.
To date, the parking endowment has produced more than $105 million for student scholarships, faculty support, the Arts District and a sustainable campus transportation system.