SHAW UNIVERSITY REFINANCES $31 MILLION OF DEBT
RALEIGH -- Shaw University has secured a $31 million federal loan from the US Department of Education through its HBCU Capital Financing program with help from U.S. Rep. Bob Etheridge, a windfall Shaw officials are celebrating as a financial lifeline to the cash-strapped school.
The refinancing allows the University to payoff its outstanding debt with Bank of America, while stretching its long-term debt out over 20 years, reducing pledged collateral and reducing the interest rate nearly two points to 4.1 percent, according to a memo from interim Vice President Lee Monroe. As a result, the University gains improved cash flow and more financial flexibility.
Interim President Dorothy C. Yancy said her office called Etheridge when the loan got tied up before its February closing date. She said the deadline wasn't dire but rather a goal set by Shaw. "You know how you have your mind set on something?" Yancy asked. "I was looking forward to that date, and it looked like it was going to go into March."
Etheridge said Shaw's president and attorney contacted his office, calling it an urgent matter, and he spoke with U.S. Secretary of Education Arne Duncan about moving quickly. He did not know either the size of the loan or the terms, he said.
"We never ask that," he said. "We don't have any business knowing that. ... Certainly Shaw is the oldest historically black institution in the South. They're important not only to Raleigh but our district. But we try to take all the calls from our constituents whether they're small or large."
Blue Stephens & Fellers served as University Counsel on the refinancing, working closely with the University and a team of attorneys, financial institutions and consultants to execute the transaction in under 30 days. The University called upon the Firm's experience in public finance, real estate and corporate governance
Read more: http://www.newsobserver.com/2010/03/24/404134/shaw-gets-31-million-loan.html
ABOUT THE UNIVERSITY
Shaw University was founded in 1865 and is the oldest historically black university in the south. Shaw University is a private, co-educational liberal arts University that awards degrees at both the undergraduate and graduate levels. The primary mission of Shaw University is teaching with the commitment to maintain excellence in research and academic programs that foster intellectual enhancement and technological skills. Read more: http://www.shawu.edu
ABOUT THE HBCU FINANCING PROGRAM
The US Department of Education's Historically Black Colleges and Universities (HBCU) seeks to provide low-cost capital to finance improvements to the infrastructure of the nation's historically black colleges and universities (HBCUs). Specifically, the program provides HBCUs with access to capital financing or refinancing for the repair, renovation, and construction of classrooms, libraries, laboratories, dormitories, instructional equipment, and research instrumentation.
The Program has made loans to 20 HBCUs (five public HBCUs and 15 private HBCUs). The colleges and universities have used their loan proceeds to refinance previous capital project loans, to renovate existing facilities, to build new facilities, or to achieve any combination of the three.
Read more: http://www2.ed.gov/programs/hbcucapfinance/index.html