Case Study

University of Chicago

PFM was retained by the University of Chicago in 2003 to assist the University in both strategic debt planning and in transaction management. In the area of debt policy management, PFM has assisted the University with a review of its debt policy including review of its guidelines for determining the optimal mix of fixed and variable rate debt. In addition, PFM is also assisting the University in evaluating the capacity of its self liquidity program and is working to broaden the University's options regarding issuance of variable rate debt to include auction rate securities and bank liquidity facilities.

In the area of transaction management, PFM assisted the University with the sale of $200 million of fixed rate and $50 million of variable rate bonds in 2003. In 2004, PFM assisted the University with its issuance of $100 million fixed and $80 million variable rate bonds in keeping with the University's goal of fixed to variable rate balance. Most recently, PFM assisted the University with a $244 million fixed rate issue that closed in June, 2007.

PFM has also assisted the University in analyzing synthetic debt options, analyzing each proposed swap and derivative transaction to evaluate the potential termination and tax risk to the University and to determine whether the structure is consistent with the University's desired risk profile and derivative policy. PFM also assisted with the negotiated procurement of an $80 million fixed payer swap to crate synthetic fixed debt on the University's 2004 variable rate issue.