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Bowling Green approves $55 million conduit bond for WKU Student Life Foundation to repair residence halls
Summary
The City Commission adopted a second-reading ordinance authorizing up to $55 million in conduit industrial building revenue bonds for the WKU Student Life Foundation to finance repairs to Regents Hall and Normal Hall; city staff emphasized the bonds are a conduit transaction and not a city obligation.
The Bowling Green Board of Commissioners on Dec. 2 approved an ordinance authorizing up to $55,000,000 in industrial building revenue bonds for the Western Kentucky University Student Life Foundation to finance repairs and improvements to Regents Hall and Normal Hall on WKU’s Normal Drive campus.
Laura Thielman of Frost Brown Todd, bond counsel for the transaction, told the commission the hearing was required under section 147(f) of the Internal Revenue Code and explained the bonds are being issued in a conduit capacity for the benefit of the 501(c)(3) Student Life Foundation. “This is not an obligation of the city in any way,” Thielman said during the presentation; city staff later reiterated the issuance “does not add to our debt.”
The authorized principal is $55 million, subject to a permitted upward adjustment of 10 percent and a downward adjustment of any amount. Proceeds will be loaned to the Student Life Foundation to fund construction, reconstruction and equipping of the named facilities, establish debt service reserves and capitalize interest as needed.
Commissioners asked no follow-up questions and no members of the public offered comments during the statutorily required hearing. The motion to adopt the ordinance passed unanimously on roll call.
Next steps include closing the conduit financing and finalizing loan documentation between the city and the WKU Student Life Foundation; city staff characterized the measure as a pass-through financing that keeps the borrowing off the city’s books.
