University of Virginia Library

FACULTY MORTGAGE BOND ISSUE

The following resolution was unanimously adopted:

• WHEREAS, The Rector and Visitors of the University of Virginia are authorized by Section 23-30.01 of the Code of Virginia of 1950, as amended, upon the affirmative vote of at least two-thirds of such Board and by and with the approval of the Governor, to borrow money and issue its bonds and secure payment thereof by the pledge of any stocks, notes or bonds held by such institution as part of its endowment funds and which are secured by a lien upon any real estate; and
• WHEREAS, Section 103 (d) (3) of the Internal Revenue Code of 1954, as amended, excepts from the definition of an "arbitrage bond" any obligation "issued as part of an issue substantially all of the proceeds of which are reasonably expected to be used to provide permanent financing for real property used or to be used for residential purposes for the personnel of an educational institution (within the meaning of Section 151 (e) (4) which grants baccalaureate or higher degrees, or to replace funds which were so used, and the yield on which over the term of the issue is not reasonably expected, at the time of the issuance of such issue, to be substantially lower than the yield on obligations acquired or to be acquired in providing such financing"; and
• WHEREAS, the endowment funds of the University of Virginia (the University) holds notes or bonds secured by mortgages or deeds of trust in real estate used to provide permanent financing for real property used for residential purposes for the personnel of the University on which the outstanding principal amount is not less than $11,000,000 and the University desires to issue its bonds to replace the endowment funds so used and to provide funds to be used in the future for such purposes;
• BE IT RESOLVED by The Rector and Visitors of the University of Virginia that there are hereby authorized to be issued and sold bonds of the University secured by a pledge of any notes or bonds held by the University as a part of its endowment funds and which are secured by a lien upon any real estate used or to be used for residential purposes for the personnel of the University, such bonds to be issued in an amount, with maturities, at rates of interest and upon such other terms and secured within the limits of Section 23-30.01 as shall be hereafter authorized by the Executive Committee of the Board and approved by the Governor of Virginia.