The University of California utilizes three primary borrowing vehicles: General Revenue Bonds, Limited Project Revenue Bonds and Medical Center Pooled Revenue Bonds and has a Commercial Paper Program. Please find below a general description of each borrowing credit. For outstanding amounts please refer to the debt summary.
- General Revenue Bonds: The General Revenue Bond (GRB) credit serves as the University's primary borrowing vehicle and is utilized to finance projects that are integral to the University's core mission of education and research. The GRB credit is secured by the University's broadest revenue pledge. Pledged revenues for FY 16-17 were $16.2 billion. General Revenues, as defined in the GRB indenture, have been amended to include certain state appropriations to secure payment of the General Revenue Bonds.
- Limited Project Revenue Bonds: The Limited Project Revenue Bond (LPRB) credit, established in 2004, is used to finance primarily auxiliary services such as student housing or parking. Pledged revenues for FY 16-17 were $1.4 billion. The LPRB credit provides the University's bondholders with a subordinated pledge of gross revenues derived only from facilities financed under the structure. This credit was created to conserve debt capacity in the GRB credit for mission-based projects.
- Medical Center Pooled Revenue Bonds: The Medical Center Pooled Revenue Bond credit serves as the primary financing vehicle for hospital debt; its initial issuance occurred in January 2007. The Bonds are secured by gross revenues of the five medical centers. Pledged revenues for FY16-17 were $11.4 billion. Previously, the medical centers issued debt on a standalone basis, secured by their individual revenue streams, of which no bonds remain outstanding.
- Commercial Paper Program: The University's commercial paper program has an authorized amount of $2.0 billion. The program, which is a combination of both taxable and tax-exempt commercial paper, is used for a variety of purposes, including the funding of working capital and to provide interim funding for approved projects that are eventually to be funded using permanent financing.
- Other University Debt: In addition to the primary borrowing vehicles listed above, the University also has other outstanding long-term debt obligations as listed below:
- Other Third Party Debt: Currently, the University has approximately $431 million outstanding through the California Infrastructure and Economic Development Bank (CIEDB), which financed the costs of a Neurosciences Building at the San Francisco campus (issued in 2010), a new research facility for the Sanford Consortium for Regenerative Medicine at the San Diego campus (issued in 2010), and a Department of Psychiatry Youth and Family Center (2130 Third Street) at the San Francisco campus (issued in 2017). For the bonds related to the Neurosciences Building and 2130 Third Street, the University is required to make base rent payments through a capital lease that equal the debt service on those bonds. For bonds related to the Sanford Consortium project, the University is required to make any debt service shortfall on those bonds through a debt service payment agreement. In addition, the University has other third party, non-recourse debt for housing projects.
- Financing Trust Structure: The University has approximately $510.8 million1 of outstanding third-party housing debt (i.e. debt issued by a party other than the University but for a project in which the University has an economic interest) under its Financing Trust Structure (FTS) credit. Currently the projects in the FTS are all housing projects at the Irvine campus. The bonds are secured solely by gross revenues of the projects financed.