EAST LANSING, Mich. — Michigan State University is planning to issue $500 million in bonds that it will be paying off over the next 100 years.
President Samuel Stanley says it's too early to say just what the money will be used for.
"The bonding amount we chose is what we think is necessary to help us make the kind of improvements we want to make and build in the infrastructure and support new projects at Michigan State University in a way that we can afford," Stanley said.
The plan is to create a fund that will be replenished.
"Those projects need to have some return on investment that allows you to re establish that fund at the end of the time," Stanley said, for example, "a research laboratory that might bring in outside dollars and indirect costs that might help return some of the money for the bond," he said.
He said it's too early to say which projects will be funded. Anything above $5 million dollars will have to be approved by the board.
MSU plans to issue century bonds, a rare sort of security that only reaches maturity after 100 years
"This bond issuance provides an innovative tool for the institution to raise funds needed to make transformative research and capital investments to advance the strategic plan of the institution," said Lisa Frace, the university's senior vice president and chief financial officer.
MSU spokesperson, Dan Olsen said the bonds haven't been sold yet, so they don't have an interest rate locked in.
"This is something that we will be investing in the infrastructure of the university over a continuum of time. So it's not something that we will spend the $500 million in a calendar year or in five years," said Board Chair, Dianne Byrum.
The topic will come back to the board in the spring. Byrum said it's going to take almost `120 days before they are in a position to sell the bonds.
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