Stanford University To Tap The Debt Market As Endowment Drops More Than 30%
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Stanford University said it intends to issue new taxable debt in a benchmark offering in the coming weeks, citing the declines in the overall value of the university's investments.
Randy Livingston, Stanford's vice president for business affairs and CFO said, "In light of the estimated declines in the overall value of the university's investments, we think it is a prudent step to ensure we have adequate liquidity and working capital, should we need it. And while we do not require the proceeds today, we believe that having them available provides us with the capacity to address potential changes in economic conditions."
University officials estimate that the value of the university's $17.2 billion endowment will be reduced by at least 30 percent by Aug. 31, 2009.
Stanford is planning to reduce the distribution from the endowment for university operations by approximately 25 percent over the next two fiscal years. Measures to reduce expenses include a salary freeze in 2009-10, elimination of staff positions and curtailment of travel and other expenses.
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