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Stanford University announced today that it intends to issue new taxable debt in a benchmark offering in the coming weeks.

"In light of the estimated declines in the overall value of the university's investments, we think it is a prudent step to ensure we have adequate liquidity and working capital, should we need it," said Randy Livingston, Stanford's vice president for business affairs and chief financial officer. "And while we do not require the proceeds today, we believe that having them available provides us with the capacity to address potential changes in economic conditions."

Like other universities that have taken similar steps, Stanford has seen its endowment decline significantly due to the global economic crisis. The value of the university's endowment was $17.2 billion as of Aug. 31, 2008. In fiscal year 2008 the distribution from the endowment for university operations provided approximately one-quarter of operating revenues.

University officials estimate that the value of the university's endowment will be reduced by at least 30 percent by Aug. 31, 2009, taking into account investment declines, the annual distribution for university operations, new endowment gifts and transfers into and out of the endowment.

Stanford is planning to reduce the distribution from the endowment for university operations by approximately 25 percent over the next two fiscal years. The campus has taken steps to reduce expenditures consistent with this and other anticipated declining revenue sources. Measures to reduce expenses include a salary freeze in 2009-10, elimination of staff positions and curtailment of travel and other expenses.

Details of the debt offering will be disclosed at the time of the transaction.

University financial information is available at http://bondholder-information.stanford.edu.

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