Last week, the university was able to refinance its largest debt issuance down to an interest rate of 3.52 percent from 5 percent, and extend the life of the bonds by 4.5 years. The covenant package Illinois Tech secured with this offering is characteristic of what one would expect to see for an institution with a much higher credit rating, which is a sign of the credit market’s belief in Illinois Tech’s strategic plan.
The overall benefit to the university this year will be a cash savings of roughly $6 million. Long term, this will save the university an average of $4.1 million annually for the next 14 years. With the refinancing of another series of bonds last year, Illinois Tech has been able to lower its overall cost of debt to 3.57 percent.
This incredible outcome is the result of outside investors believing in Illinois Tech’s story and the direction that was so well laid out in the new strategic plan. That story was reinforced by the generous gifts from the Board of Trustees and the discipline that our faculty and staff have shown over the last few years.