University of Virginia Library

APPROVAL OF BOND ISSUANCE

• The following resolution was adopted:
• WHEREAS, pursuant to Chapter 3.2, Title 23 of the Code of Virginia of 1950, as amended (the Act), the General Assembly of Virginia has authorized the Virginia College Building Authority (the Authority) to develop a pooled bond program (the Program) to purchase bonds and other debt instruments issued by public institutions of higher education in the Commonwealth of Virginia (the Institutions) to finance or refinance the construction of projects of capital improvement specifically included in a bill passed by a majority of those elected to each house of the General Assembly of Virginia (the Projects); and
• WHEREAS, the Authority intends to issue from time to time under the Program its Educational Facilities Revenue Bonds (Public Higher Education Financing Program) (the Bonds) to finance the purchase of bonds and other debt instruments issued by the Institutions to finance or refinance the Projects, all in the furtherance of the purposes of the Act and the Program; and
• WHEREAS, The Rector and Visitors of the University of Virginia (the Board) may from time to time wish to finance or refinance Projects of The Rector and Visitors of the University of Virginia (the Institution) through the Program; and
• WHEREAS, if the Institution wishes to finance or refinance a Project through the Program, it will be necessary for the Institution to enter into a Loan Agreement (a Loan Agreement) between the Authority and the Institution and to evidence the loan to be made by the Authority to the Institution pursuant to the Loan Agreement by issuing the Institutions promissory note (the Note) pursuant to Section 23-19 of the Code of Virginia of 1950, as amended. Pursuant to the Loan Agreement, the Authority will agree to issue its Bonds and to use certain proceeds of the Bonds to purchase the Note issued by the Institution and the Institution will agree to use the proceeds received from the Authority to finance or refinance the construction of the Project and to make payments under the Loan Agreement and the Note in sums sufficient to pay, among other administrative and arbitrage rebate payments, the principal of, premium, if any, and interest due on that portion of the Bonds issued to purchase the Note; and
• WHEREAS, the Institution now proposes to sell to the Authority its Note (the 1999A Note) to be issued under a Loan Agreement (the 1999A Loan Agreement) to finance or refinance all or a portion of the costs of the Biomedical Engineering and Medical Sciences building project and the Medical Office Building in Orange project (together, the 1999A Project); and
• WHEREAS, there has been presented to the Board the proposed forms of the 1999A Note and the 1999A Loan Agreement; and
• WHEREAS, it is the desire of the Board to approve the execution and delivery of the 1999A Loan Agreement and the execution and issuance of the 1999A Note on terms and conditions substantially in accordance with the forms presented to the Board and, similarly, to authorize officers of the Institution to execute, deliver and issue in the name of and on behalf of the Institution, the 1999A Loan Agreement, the 1999A Note and any and all documents necessary to effectuate the financing or refinancing of all or a portion of the costs of the 1999A Project through the Program with the Authority and to facilitate the purchase of the 1999A Note by the Authority; and
• WHEREAS, it is the desire of the Board to approve the further participation by the Institution in the Program and to authorize the execution, delivery and issuance of such other Loan Agreements and Notes on terms and conditions substantially similar to the 1999A Loan Agreement and 1999A Note and to similarly authorize certain officers of the Institution to execute, deliver and issue in the name of and on behalf of the Institution, all Loan Agreements, all Notes and any and all future documents necessary to effectuate the Program with the Authority and to facilitate the purchase of the Notes by the Authority.
• RESOLVED THAT:

Section 1. The 1999A Loan Agreement and 1999A Note are approved in substantially the forms presented to the Board and the pledge of Pledged General Revenues to the payment of the 1999A Note, as provided in the 1999A Loan Agreement, is hereby authorized.

Section 2. The President of the Institution and the Executive Vice President and Chief Financial Officer of the Institution (the Authorized Officers), or either of them, are hereby delegated and invested with full power and authority to execute, deliver and issue, on behalf of the Board,

  (a) the 1999A Loan Agreement in substantially the form submitted to the Board with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced conclusively by the execution and delivery of the 1999A Loan Agreement,

  (b) the 1999A Note in substantially the form submitted to the Board with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced conclusively by the execution and issuance of the 1999A Note, and

  (c) any and all other documents, instruments or certificates as may be deemed necessary to consummate the financing or refinancing of all or a portion of the costs of the 1999A Project through the Program, the construction of the 1999A Project and the Institutions participation in the Program, and to further carry out the purposes and intent of this Resolution. The Authorized Officers are directed to take such steps and deliver such certificates prior to the delivery of the 1999A Note as may be required under existing obligations of the Institution.

Section 3. The Authorized Officers, or either of them, are hereby delegated and invested with full power and authority to execute and deliver, on behalf of the Board,

  (a) such future Loan Agreements in substantially the form of the 1999A Loan Agreement with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced exclusively by the execution and delivery of the future Loan Agreement,

  (b) such future Notes in substantially the form of the 1999A Note with such changes, insertions or omissions as may be approved by the Authorized Officers, whose approval shall be evidenced exclusively by the execution and delivery of the future Note, and

  (c) any and all other documents, instruments or certificates as may be deemed necessary in the future to consummate the Program, the construction of the Projects and the Institutions participation in the Program, and to further carry out the purposes and intent of this Resolution in the future, it being the intent of the Board that no further action on behalf of the Board shall be necessary to empower the Authorized Officers, or either of them, to execute, deliver and issue such future Loan Agreements, future Notes and other documents as may be deemed necessary in order for the Institution to participate in the Program in the future.

Section 4. The authorizations given above as to the execution, delivery and issuance of the 1999A Loan Agreement and the 1999A Note are subject to the following parameters:

  (a) that the principal amount to be paid under the 1999A Note shall not be greater than the aggregate amount authorized for the components of the 1999A Project by the General Assembly of Virginia, including any adjustments required or permitted by law,

  (b) that the interest rate payable under the 1999A Note shall not exceed a true or Canadian interest cost more than fifty basis points higher than the interest rate for AA rated securities with comparable maturities, as reported by Delphis-Hanover, or another comparable service or index, taking into account original issue discount or premium, if any,

  (c) that the weighted average maturity of the principal payments due under the 1999A Note shall not be in excess of twenty (20) years,

  (d) that the last principal payment date under the 1999A Note shall not extend beyond the period of the reasonably expected economic life of the 1999A Project,

  (e) that the financing of the 1999A Project and the terms and provisions of the 1999A Loan Agreement and the 1999A Note will comply with the Alternative Construction and Financing Guidelines issued by the Commonwealth's Secretary of Finance, and

  (f) that the actual interest rates, maturities, and date of the 1999A Note shall be approved by an Authorized Officer, which approval will be evidenced by the execution of the 1999A Note. The 1999A Note shall be sold to the Authority at a price of par.

Section 5. The authorizations given above as to the execution, delivery and issuance of any future Loan Agreements and future Notes are subject to the following parameters:

  (a) that the principal amount to be paid under such Notes shall not be greater than the amount authorized for the Projects by the General Assembly of Virginia, including any adjustments required or permitted by law,

  (b) that the interest rate payable under such Notes shall not exceed a true or Canadian interest cost more than fifty basis points higher than the interest rate for AA/ rated securities with comparable maturities, as reported by Delphis-Hanover, or another comparable service or index, taking into account original issue discount or premium, if any,

  (c) that the weighted average maturity of the principal payments due under such Notes shall not be in excess of twenty (20) years,

  (d) that the last principal payment date under such Notes shall not extend beyond the period of the reasonably expected economic life of the Projects being financed, and

  (e) that the financing of the Projects and the terms and provisions of such Loan Agreements and Notes will comply with the Alternative Construction and Financing Guidelines issued by the Commonwealth's Secretary of Finance.

Section 6. The Board acknowledges, on behalf of the Institution, that if the Institution fails to make any payments of debt service due under any Loan Agreement or Note, including the 1999A Loan Agreement and the 1999A Note, the Program authorizes the State Comptroller to charge against the appropriations available to the Institution all future payments of debt service on that Loan Agreement and Note when due and payable and to make such payments to the Authority or its designee, so as to ensure that no future default will occur on such Loan Agreement or Note.

Section 7. The Board agrees that if the Authority determines that the Institution is an obligated person under Rule 15c2-12 of the Securities and Exchange Commission with respect to any issue of Bonds, the Institution will enter into a continuing disclosure undertaking in form and substance satisfactory to the Authority and the Institution and will comply with the provisions and disclosure obligations contained therein.

Section 8. This resolution shall take effect immediately. (See Fiscal Impact Statement for this resolution as Attachment F).