About The Virginia College Building Authority
The Virginia College Building Authority provides financing for certain capital projects and educational equipment for state institutions of higher education, and provides a conduit financing mechanism for private, non-profit institutions of higher education in Virginia.
21st Century College and Equipment Programs
The VCBA Equipment Program was established in 1986 in an effort to address technological equipment deficiencies in public institutions of higher education. The Virginia General Assembly created the 21st Century College Program in 1996 to finance certain specified capital projects at public institutions of higher education in the Commonwealth. In May 1999, bonds for the Equipment Program and the 21st Century College program were issued together resulting in the creation of the 21st Century College and Equipment Program. The bonds are limited obligations of the Authority with debt service payable solely from appropriations made by the General Assembly. Fitch, Moody's and Standard & Poor's rate these bonds AA+, Aa1 and AA+, respectively.
Pooled Bond Financing Program
The Virginia General Assembly created the Public Higher Education Financing Program in 1996. This program, which is commonly referred to as the Pooled Bond Program, allows the Authority to issue bonds and use the proceeds to purchase debt obligations (notes) of the participating public institutions of higher education. Proceeds of the notes are used by the institutions to finance or refinance capital projects approved by the General Assembly. Participating institutions pledge their general revenues as security for the obligations purchased by the Authority. An additional security mechanism allows the Authority to intercept appropriations from the Commonwealth to the institution in the event the institution fails to pay on its obligations held by the Authority. Pooled Bond issue sales are expected to occur at least annually. Fitch, Moody's and Standard & Poor's rate these bonds AA+, Aa1 and AA+, respectively.
Private School Financings
The Authority is also authorized under the Educational Facilities Authority Act of 1972, to use the proceeds of its bonds and notes to finance educational projects through loans to private, nonprofit institutions of higher education within the Commonwealth. Under this program, the VCBA serves as a conduit borrower for the private institution. This arrangement allows these institutions the benefits of issuing at tax-exempt rates. The Bonds are payable solely from loan repayments made by the respective institution and are in no way secured by the Commonwealth or the Authority. Bonds through this program are issued at the request of the private institution on an as needed basis. Bond ratings are dependent on the underlying rating of the institution.