Stanford doubles taxable commercial paper program to $1 billion
2 min read
Bloomberg News
Stanford University increased a commercial paper program by $500 million to $1 billion, marking the latest institution in U.S. higher education to do so as colleges contend with federal funding pressures.
The university’s board approved the increase in authorization, according to analysts at Moody’s Ratings, who said the funding will “provide capacity for working capital and various capital items.”
Commercial paper is a short-term financing tool widely used by companies, governments and colleges to fund infrastructure and other projects.
Institutions often issue the notes as bridge financing before replacing them with long-term debt. The tactic has become popular this year as schools seek liquidity amid
The authorization applies to taxable commercial paper, which can have a more flexible use of proceeds than tax-exempt securities.
Representatives from Stanford University didn’t respond to a request for comment.
Stanford, which is rated Aaa by Moody’s, also has authorization for up to $300 million of tax-exempt commercial paper notes, Moody’s said.
The top grade “reflects Stanford’s exceptional brand and strategic positioning, supported by its prestigious reputation, substantial wealth and scale, large and growing research platform, and extensive high-end and specialized healthcare activities,” Moody’s analysts led by Michael Osborn said in a July report.
Stanford’s overall commercial paper program will be $1.3 billion, according to Moody’s, which said there is “no credit impact” from the increase in authorization.
“Careful planning and good centralized fiscal supervision with close integration of capital and financial plans supports the university’s exceptional financial strategy,” the analysts wrote.
The University of Texas System also increased part of its short-term lending program to $2.5 billion, boosting the capacity of two of its commercial paper series by more than 40%, to support the system’s capital plan.
