UBC Treasury is responsible for facilitating any financing required for UBC capital projects.
Treasury essentially acts as the internal bank of the University, in order to provide cost effective financing of UBC’s growth.
Financing provided through Treasury enable UBC to undertake capital projects that improve sustainability, research, student experience and learning initiatives throughout the university. Treasury typically provides financing for capital projects at a fixed interest rate for a term of up to 30 years.
UBC Internal Loan Rates
|2 years||3 years||5 years||7 years||10 years||Long Term (> 10 years)|
|3.00%||3.50%||4.25 %||5.00 %||5.50 %||5.75 %|
Projects with financing requirements of over $5.0m must first be approved by the UBC Board of Governors through a four-stage capital project approval process. Any financing requirements below $5.0m require the prior approval of the university Executive.
Once a project has been approved, and if financing is required from UBC, Treasury acts in a consulting role during planning and construction and then facilitates financing once the project is substantially complete.
Financing is facilitated using an internal loan agreement. The agreement stipulates the terms of the financing arrangement and has to be signed off by the department(s) responsible for debt servicing and the appropriate Vice President. Once signed off, the loan will be advanced and regular debt servicing payments will be set up.
In order to have funds available for these internal loan arrangements, UBC Treasury has traditionally raised capital by issuing debt into the capital market or through Provincial Government agency loans as per guidelines approved by UBC’s Board of Governors (pdf).
UBC currently has $250m in public debt and $125m in Provincial Loan advances. This model of seeking financing and re-advancing funds to a department or faculty is used by many universities throughout Canada and the US. More recently, Treasury has utilized excess working capital to finance capital projects and Student Housing Financing Endowment proceeds to finance student housing.
UBC Credit Rating
The University's debt credit rating is rated by two agencies : S&P and Moody's. The most recent credit ratings are as follows:
|Date of rating||December 2019||February 2020|
|Long term rating||Aa1||AA+|