The University of Missouri announced today that it has issued $332 million in bonds to finance more than a dozen projects at its four campuses, including new residence halls, a new patient tower in Columbia, and upgrading safety components such as new sprinkler systems. Most of the projects are on the Kansas City and Columbia campuses.

The university is taking advantage of a provision in the federal stimulus package that will give them a 35 percent federal subsidy on the interest paid on the bonds. About $256 million of the total is fixed-rate bonds in the Build America Bonds program. The other $75 million is from tax-exempt bonds. The overall true interest cost of the bond issue is 3.8 percent, the university said.

UMSL’s highly-coveted renovation of the Benton-Stadler science building is not included in the list of projects to be funded by this bond issue. I’m guessing that may be because the university usually only issues bonds for revenue-generating buildings (residence halls, for example, bring in money from housing fees charged to students). But I’m checking with the university to confirm the exact reason.

“I can’t think of a better time for the university to explore new and creative funding mechanisms than now, and the Build America Bonds are an ideal fit for the university,” University of Missouri System President Gary Forsee said in a news release. “Through the federal stimulus package, the university is able to use debt financing for revenue-generating facilities such as student housing and a new patient care tower. This affords the university the opportunity to reduce the debt service and represents a win-win for the university and those it serves.”

Moody’s and Standard & Poor’s recently gave the university favorable credit ratings of AA2 with a stable outlook, the university said.

This new bond issue will bring the university’s total outstanding facilities debt up to $1.2 billion and its annual debt service up to $85 million.

Below, I have pasted the university’s list of projects to be funded by the bond initiative:

Projects the bond initiative will support include:

• Renovation of power plan and other energy management improvements and additions, Columbia: Includes power plant heat and power upgrades and replacement of cooling towers and steam lines.                                                                                                                    $62.1 million*
• Hudson/Gillett residence  hall renovation, Columbia: Upgrades and improves this 420-bed residence hall complex. Hudson Hall completion date scheduled for May 2010; Gillett Hall completion date scheduled for May 2011.                                                                       $33.1 million
• Construction of mid-campus residence hall, Columbia. Includes construction of a new 526-bed residence hall, renovates Defoe/Graham residence halls, and builds a new link between the north ends of Defoe/Graham.                                                                                      $4.3 million
• Construction of Missouri Orthopedic Institute, new patient care tower and relocation and construction of Children’s Hospital, Health System: The four-story Orthopedics Institute will provide surgery, diagnostic and treatment spaces, while the eight-floor patient tower will provide space for a new cancer center and new operating and patient rooms. Children’s Hospital will be moved to Columbia Regional Hospital and will include changes and upgrades for pediatrics and adolescent patients.                                                                                             $120.0 million**
• Construction of soccer/track facility, Kansas City: The Stanley H. Durwood Soccer Stadium and Recreational Field will include a synthetic turf playing field, recreational track, grandstand and team support facilities.                                                                                          $ 8.0 million
• Construction of new student union, Kansas City. The four-story student union will include a new campus center, food service, bookstore, meeting rooms and student organizational space.  It will open for the fall 2011 semester.                                                                $ 36.8 million
• Construction of Interactive Learning Center Phase I South, Kansas City: Provides accommodations for an automated storage and retrieval system that allows storage for 80 percent of the current collection, an interim lobby/plaza and renovations within the existing library.                                                                                                                                                            $10.0 million
• Construction of Oak Street West Phase II housing facility, Kansas City: The four-story, suite-style residence hall will provide 328 beds beginning in fall 2009.                                                                                                                                               $17.1 million
• Renovation of Thomas Jefferson South residence hall, Missouri S&T: The project will renovate and upgrade the 325-bed residence hall by August 2010.                                                                                                                                 $13.0 million
• Renovation of Flushing Meadows, St. Louis: This project creates a continuing education facility in the West County of St. Louis.                                                                                                                                                                                                 $3.4 million
• Critical repairs, renovations and adaptations, Systemwide. Renovation and repair projects that may be funded include several buildings throughout the four-campus system, as well as critical fire safety, elevator and roof replacement projects.                                                                                    $35.0 million

* will require an additional $40 million in debt financing in the future

** will require an additional $20 million in debt financing in the future

The Grade is the St. Louis region’s premier blog on education and child welfare. To read other recent posts, go to www.stltoday.com/thegrade.