The University of California is expected to save more than $1 billion over the next several years after initiating a series of bond sales earlier this month, according to a UC statement released Monday.
The sales were part of a plan for the University to generate savings by restructuring debt for the state, since the UC can borrow money at a lower interest rate than the state can.
The UC expects to save $100 million each year for the next decade and up to $21 million each year for the following seven years – millions more than its previous estimate, which was $80 million a year for the next decade. The increase in the estimate can be attributed to a strong demand for the bonds, according to the release.
The savings from the bond sales will be used to pay for the University’s growing pension costs. The University’s contributions to its pension fund, which is running short on funds, are expected to be one of the UC’s biggest costs in the future, officials have said.
“This bond restructuring accomplished two goals: Save taxpayer money over the life of the bonds and reduce financial stress on our operating budget in the coming years,” said Peter Taylor, UC chief financial officer, in the University’s statement.
Compiled by Kristen Taketa, Bruin senior staff.