KU Athletics exploring $20M line of credit in case ‘emergency liquidity’ needed
University of Kansas chancellor Douglas Girod put forth a plan Wednesday to have KU Athletics pursue a short-term line of credit with the aim of helping the department get through the coronavirus pandemic.
Girod, in an email calling a special meeting of the KU Athletics Board of Directors, is proposing the athletic department seek a $20 million line of credit “to provide emergency liquidity in the event the COVID pandemic modifies the upcoming football and/or basketball seasons in such a way that creates significant operational deficits, even after significant cost-cutting measures.”
The hope, Girod said, would be for KU Athletics to keep up operations while avoiding a need to seek financial assistance from KU.
Wednesday’s proposal from Girod, which board members have until Aug. 21 to vote upon, would authorize KU athletic director Jeff Long and chief financial officer Pat Kaufman to execute term sheets for a $20 million operational line of credit. If approved, Girod said final authorization would be discussed at the upcoming Sept. 16 board meeting.
The $20 million line of credit would mature on Dec. 31, 2021, Girod said, with a variable interest rate that Girod said was “currently approximately 1.50%.”
In a separate matter, Girod also proposed that KU Athletics pursue a $30 million bridge line of credit, working to refinance its approximately $29.8 million in outstanding bond debt. The idea in part, Girod said, would be to take advantage of current low interest rates while also restructuring terms so that the athletic department can put off making payments on the debt for two years in order to increase cash flow during the pandemic.
This story was originally published August 19, 2020 at 5:02 PM with the headline "KU Athletics exploring $20M line of credit in case ‘emergency liquidity’ needed."
