Lawrence Technological University (LTU or the University) was founded 85 years ago at the peak of the Great Depression — and at the center of an innovation explosion. Fostered by Henry and Edsel Ford and housed in Ford’s Model T assembly plant, the University provided engineers at the major automaker with the opportunity to earn a bachelor or master’s degree completely in an evening program.
Over the years, the University has continued to prosper and accelerate its growth and is now expanding into nursing and other disciplines with special emphasis placed on educational programs that focus on "applied research embracing theory and practice.”
PNC became part of the University’s credit deal team in 2010 by providing direct placement tax-exempt financing with a floating-to-fixed interest rate swap to refund a portion of the University’s outstanding debt as well as an operating line of credit.
Determined to become a full-time, residential, STEM-focused institution, the University needed to add student housing and expand other facilities. The bank was ready and has continued to support the University’s growth trajectory.
In 2014, PNC assisted LTU with $11.9 million of additional tax-exempt bank financing with a floating-to-fixed interest rate swap to facilitate its expansion plans and build new student housing, increasing the total of on-campus housing capacity.
In early 2017, the University chose PNC Capital Markets (PNCCM) to lead its $44.3 million tax-exempt fixed rate financing. The Series 2017 Bonds incorporated the full financing of another new housing facility, allowing a realization of a key component of LTU’s Strategic Plan. The solution also incorporated a level-debt service refinancing of existing variable rate bonds, timed to close after the expiration of associated interest rate swaps and prior to the letter of credit expiration date.
The PNC team worked with the University’s finance staff and counsel to amend and streamline its Master Trust Indenture, reducing covenants from seven to four.
Concurrent with the capital markets bond issue in 2017, PNC renewed and extended LTU’s $6.4 million Series 2010 direct purchase bond to maturity and amended the existing interest rate swap, which together resulted in a lower all-in borrowing cost for the University.
These successful transactions demonstrated PNC’s ability to provide comprehensive financing solutions through our capital markets/bank dual coverage model and higher education sector expertise.
“Here, we take abstract ideas into the real world to solve tomorrow’s problems,” notes Linda L. Height, Vice President of Finance and Administration. “Similarly, PNC brought creative ideas to us to address our financing needs and better position us for the future. The transactions went smoothly and we were able to accomplish a number of key objectives including a good rate in the capital markets, greater flexibility, elimination of bank renewal risk and debt service certainty that allows us to continue to be fiscally prudent.”
Location: Southfield, Michigan
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