The UM System Board of Curators unanimously approved a deal to refinance up to $350 million of existing debt with the hopes of generating savings.
Tom Richards, UM System’s interim vice president of finance, said the lower interest rates he observed in April provided an opportunity for the system to lock down a lower rate.
“If you look at general market rates — you’ll want to focus on the 10-year treasury (notes) — they went down around the beginning of April,” Richards said.
According to [the Wall Street Journal’s Market Watch](http://www.marketwatch.com/investing/bond/10_year), the interest rate for 10-year treasury notes was approximately 2.80 percent at the start of April, and was 2.62 percent at closing on May 1.
The refinancing could potentially generate between $15-20 million in savings, which would be used to finance renovations of facilities across the four campuses, Richards said.
“In the last three years, this is the third major refinance transaction we have done,” he said. “(In the past,) we have yielded savings of $15 million that we have been able to dedicate to critical maintenance and repair projects on the campuses.”
Facility needs on MU’s campus include a $32 million renovation to Lafferre Hall, which [scored a 0.91 on the Facilities Conditions Needs Index](https://www.themaneater.com/stories/2014/1/31/board-curators-discusses-renovations-facilities-se/), meaning 91 percent of its systems need replacement.
Richards said the curators will meet with advisors from Morgan Stanley, the lead manager of the deal, in New York on May 12, and go to market on May 13.
The system also assembled the Total Rewards Ad Hoc Task Force in an attempt to balance [$1 billion of liabilities accrued from rising benefits costs](https://www.themaneater.com/stories/2014/4/30/um-system-task-force-addresses-faculty-salaries-an/).