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Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
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Dukester Offline
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Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
Not sure if this has already been posted on here, but I heard about this last night.

With the football stadium, and new basketball arena - there was certainly going to be some payments due in a time JMU would not be receiving ticket revenue - this was a common sense move by Northam that will help a lot of universities in Virginia.

https://www.nbcwashington.com/news/local...s/2425167/


Northam's plan comes amid widespread disruption at Virginia colleges due to the coronavirus. The impact of the governor's refinancing plan will affect schools differently. Under Northam's plan, James Madison University will save $43.7 million, Virginia Tech will save $40 million and the University of Mary Washington could save more than $9 million, while the University of Virginia is expected to see only about $344,000 in savings.

$43,700,000 savings to JMU. Thank you Ralph!
09-23-2020 12:19 PM
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Dukester Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
$43.7 Million is a HUGE number.

Does that better position us financially to move up? That's a tremendous amount of savings.

Wouldn't that cover around a decade of the additional costs to move up?
(This post was last modified: 09-23-2020 12:47 PM by Dukester.)
09-23-2020 12:41 PM
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JMURocks Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
This is over the next 2 years, right? There have also been some huge losses I would think, and we aren't out of the woods yet.

Hopefully this will produce a financial surplus, but who knows at this point?
(This post was last modified: 09-23-2020 02:29 PM by JMURocks.)
09-23-2020 02:28 PM
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Dukester Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:28 PM)JMURocks Wrote:  This is over the next 2 years, right? There have also been some huge losses I would think, and we aren't out of the woods yet.

Hopefully this will produce a financial surplus, but who knows at this point?

I'm not sure how it works - but this is how I would think it would work. The debt would be the same, but the interest will go down dramatically making the monthly/annual bond payments much less than they were. I doubt it was a cash out situation. Potentially the reduction in the annual bond cost would go down by more than the last likely lost gate receipts for football and basketball.

It's possible the payments stayed the same and the term of the loan was greatly reduced. Really a lot of way it could happen, but I'd guess the term length of bond stays the same, but the payments go down.
(This post was last modified: 09-23-2020 02:38 PM by Dukester.)
09-23-2020 02:35 PM
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Hart Foundation Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
This is good news and will help offset the financial drain when parents demand refunds for the $2,159 annual athletics fee. Even the dummies will eventually realize they are paying for something they aren’t getting.
09-23-2020 02:41 PM
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Dukester Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:41 PM)Hart Foundation Wrote:  This is good news and will help offset the financial drain when parents demand refunds for the $2,159 annual athletics fee. Even the dummies will eventually realize they are paying for something they aren’t getting.

So many options including a reduction of student fees.

Hopefully the DNR digs into this and provides some answers.

hint hint
09-23-2020 02:51 PM
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JMURocks Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:35 PM)Dukester Wrote:  
(09-23-2020 02:28 PM)JMURocks Wrote:  This is over the next 2 years, right? There have also been some huge losses I would think, and we aren't out of the woods yet.

Hopefully this will produce a financial surplus, but who knows at this point?

I'm not sure how it works - but this is how I would think it would work. The debt would be the same, but the interest will go down dramatically making the monthly/annual bond payments much less than they were. I doubt it was a cash out situation. Potentially the reduction in the annual bond cost would go down by more than the last likely lost gate receipts for football and basketball.

It's possible the payments stayed the same and the term of the loan was greatly reduced. Really a lot of way it could happen, but I'd guess the term length of bond stays the same, but the payments go down.

Impression from the article is Principal payments deferred 2 years as part of the refinance, with possibly a small reduction in interest payments also.

The linked article said that as a result of the refinancing, schools would not be required to make any Principal payments on bonds for the next two years, and this is where the bulk of the school savings come from that can be used to help offset pandemic costs, or improve balance sheet, etc. Did not get the impression the long term yearly savings are this dramatic.
09-23-2020 04:43 PM
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Longhorn Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:28 PM)JMURocks Wrote:  This is over the next 2 years, right? There have also been some huge losses I would think, and we aren't out of the woods yet.

Hopefully this will produce a financial surplus, but who knows at this point?

This isn’t free money, and I seriously doubt as a byproduct it will produce a surplus. It will simply take the heat off of JMU in balancing the books, and save elements of the core mission...specifically academic programs.
09-23-2020 04:49 PM
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Deez Nuts Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
Student fees pay for more than athletics... but Hart knows this.
09-23-2020 09:54 PM
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:51 PM)Dukester Wrote:  
(09-23-2020 02:41 PM)Hart Foundation Wrote:  This is good news and will help offset the financial drain when parents demand refunds for the $2,159 annual athletics fee. Even the dummies will eventually realize they are paying for something they aren’t getting.

So many options including a reduction of student fees.

Hopefully the DNR digs into this and provides some answers.

hint hint

There will be no reduction in student fees. Attending students will be fortunate if tuition and fees don’t rise. I offer this statement not as facts, but simply as a realistic observation based on a general knowledge about how JMU’s budget is constructed, and what is happening to JMU’s income stream during this time of the pandemic.

The response to COVID has JMU hemorrhaging money. New construction has been postponed, and in some instances possibly being eliminated altogether. Bricks and mortar are one thing, but academic programs are another. Student fees pay for far more than athletics, and funding for academic programs are at serious risk under the current situation. Reducing fees would do nothing but exacerbate the fiscal squeeze on JMU.
09-24-2020 03:15 AM
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NJDuke97 Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
I was just waiting for someone to blame the JMU admin for this legislation.
09-24-2020 06:09 AM
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Potomac Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
JMU was going to save the most money from this of any Virginia university. That's big to save $43M. Now do the students a favor and don't raise their tuition and fees for awhile...
09-24-2020 08:59 AM
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NovaDukes Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
How much is JMU saving over the life of the loan? Certainly deferring principal payments for a couple of years will help cash flow, but is it really saving JMU $40+ million? I'm not trying to make this political, I think this was a good move on the Governor's part, but I do think the story may mislead a little.
09-24-2020 09:11 AM
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-24-2020 09:11 AM)NovaDukes Wrote:  How much is JMU saving over the life of the loan? Certainly deferring principal payments for a couple of years will help cash flow, but is it really saving JMU $40+ million? I'm not trying to make this political, I think this was a good move on the Governor's part, but I do think the story may mislead a little.

Exactly. It postpones repayment of the principal on the debt, which helps now when it’s very needed, but there’s really no “savings.” The debt remains. The headline is misleading.
09-24-2020 09:39 AM
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-24-2020 09:39 AM)Longhorn Wrote:  
(09-24-2020 09:11 AM)NovaDukes Wrote:  How much is JMU saving over the life of the loan? Certainly deferring principal payments for a couple of years will help cash flow, but is it really saving JMU $40+ million? I'm not trying to make this political, I think this was a good move on the Governor's part, but I do think the story may mislead a little.

Exactly. It postpones repayment of the principal on the debt, which helps now when it’s very needed, but there’s really no “savings.” The debt remains. The headline is misleading.

The magnitude of the savings indicates how debt leveraged JMU is. Thanks go to Alger and King. And since there is a good portion of the debt that is related to sports facilities, we can blame Bourne, too. I think that covers them all, right? 05-stirthepot
09-24-2020 10:41 AM
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JMaddy Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-24-2020 09:39 AM)Longhorn Wrote:  
(09-24-2020 09:11 AM)NovaDukes Wrote:  How much is JMU saving over the life of the loan? Certainly deferring principal payments for a couple of years will help cash flow, but is it really saving JMU $40+ million? I'm not trying to make this political, I think this was a good move on the Governor's part, but I do think the story may mislead a little.

Exactly. It postpones repayment of the principal on the debt, which helps now when it’s very needed, but there’s really no “savings.” The debt remains. The headline is misleading.

Well a change in interest could result in savings but yes it is always important to remember there is a difference between an 'accounting savings' and 'real savings' when it comes to debt service.
09-24-2020 11:44 AM
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mturn017 Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
(09-23-2020 02:35 PM)Dukester Wrote:  
(09-23-2020 02:28 PM)JMURocks Wrote:  This is over the next 2 years, right? There have also been some huge losses I would think, and we aren't out of the woods yet.

Hopefully this will produce a financial surplus, but who knows at this point?

I'm not sure how it works - but this is how I would think it would work. The debt would be the same, but the interest will go down dramatically making the monthly/annual bond payments much less than they were. I doubt it was a cash out situation. Potentially the reduction in the annual bond cost would go down by more than the last likely lost gate receipts for football and basketball.

It's possible the payments stayed the same and the term of the loan was greatly reduced. Really a lot of way it could happen, but I'd guess the term length of bond stays the same, but the payments go down.

Looks like refinance higher rate bonds at lower rates and suspend principal payments through 2023. The lower interest rates is real savings, the principal payment suspension will help cash flows through the next few years but the debt isn't going away.
09-24-2020 03:32 PM
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Wear Purple Offline
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RE: Virginia Governor Ralph Northam Announces Plans to Refinance College Bonds
Speaking of the Governor, he has tested positive for COVID per reports this afternoon.
09-25-2020 02:42 PM
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