Financial Services Financial Services: Tax-exempt bonds Taxable - - PowerPoint PPT Presentation

Financial Services:

• Tax-exempt bonds
• Taxable bonds
• State-supported bond programs
• Tax-exempt leasing program

Post-closing/ Other Services:

• Investment of bond funds
• Monitoring for refunding opportunities
• Arbitrage compliance
• Swap monitoring
• Escrow restructuring
• Higher education finance conferences
• Investor relations

Financial Services

Forward Calendar

• The Richard Stockton College of NJ

$40 million Com petitive

• The William Paterson University of NJ

$90 million

• Monmouth University

$20 million Lehm an Brothers

• Saint Peter’s College

$45 million Direct Placem ent

Public Institutions Project Amount

Montclair State University Refunding $ 6,150,000 New Jersey City University Refunding $ 17,910,000 Rowan University Refunding $ 121,355,000 Kean University (three issues) 2 residence halls; parking deck; $ 274,951,666 refunding; lease purchase Thomas Edison State College Lease purchase $ 2,700,000

Private Institutions Project Amount

Centenary College Refunding of a bank loan; $ 4,784,617 capital improvements Institute for Advanced Study Academic building addition; $ 20,000,000 network and utility upgrades; renovations to academic buildings Drew University Residence hall; renovations $ 29,135,000 to existing dorms; capital improvements; equipment Princeton University (two issues) Refunding; capital improvements $ 392,620,000 Rider University Residence hall; parking facility; $ 22,000,000 infrastructure improvements Georgian Court University Wellness center; refunding; office $ 28,030,000 (two issues) space Stevens Institute of Technology Refunding $ 71,060,000

Grand Total: $ 990,696,283

20 0 7 Transactions

Princeton University

Butler College Dormitory Lewis Library

Kean University

New Residence Halls and Dining

NJEFA Issuance Overview

* Includes par amount issued to date in 2007

Source: NJEFA

By Number of Issues By Par Amount (in Million $)

* Includes par amount issued in 1969 ** Includes par amount issued to date in 2007

Source: NJEFA

NJEFA Bonds Issued by Decade vs. Last 7 ½ Years

1,000 2,000 3,000 4,000 5,000 6,000 7,000

In Million $

1970s* 1980s 1990s 2000s**

$6,533,517,030 $2,505,433,659 $884,117,000 $425,931,000

Higher Education: Heavy Borrowing Continues

$0 $5 $10 $15 $20 $25 $30 $35

1 9 9 5 1 9 9 6 1 9 9 7 1 9 9 8 1 9 9 9 2 2 1 2 2 2 3 2 4 2 5

0% 1% 2% 3% 4% 5% 6% 7% 8% 9% Higher Education $billion HE % Share of "Municipal" Market

Sources: Moody’s Investors Service; Thomson Financial

64,007 379,686

2005

65,105 385,612

2006

12,526 (23.82%) 49,682 (14.79%)

Cumulative Increase

61,428 379,447

2004

58,277 372,696

2003

55,866 361,757

2002

53,205 346,277

2001

52,579 335,930

2000 Total Degrees/ Certificates Total Enrollments

NJ Enrollm ent: Degrees Conferred 20 0 0 -20 0 6

Source: New Jersey Commission on Higher Education

Sources: The College Board; U.S. Census Bureau, 2006

Earnings Prem ium Relative to Price of Education

Am erica Rules

Source: The Economist – The Brains Business – A Survey of Higher Education, Sept. 10, 2005

Education, Earnings and Tax Paym ents

Sources: The College Board; U.S. Census Bureau, 2006; Internal Revenue Service, 2006; McIntyre et al., 2003

Sources: The College Board; U.S. Census Bureau, Current Population Survey, 2006 Annual Social and Economic Supplement

Public Assistance Program s

Econom ic Benefits to Others

Sources: The College Board; Moretti, 2004

Sources: The College Board; Bureau of Labor Statistics, 2007

Volunteerism

Earnings Over Tim e by Education Level and Gender

Sources: The College Board; National Center for Education Statistics (NCES), 2007, Indicator 20

Sources: The College Board; Snyder et al., 2006; U.S. Census Bureau, 2005

College Enrollm ent by Gender

Ages 35-64 Ages 25-34

Adults holding a college degree

Measuring Up 20 0 6

Sources: “Measuring Up – 2006” – The National Center for Public Policy and Higher Education; Organisation of Economic Co-operation and Development (OECD). Data represent the percentage of adults with an Associate’s degree or higher in 2003

College Participation College Completion

Ages 18-24

Sources: “Measuring Up – 2006” – The National Center for Public Policy and Higher Education; Organisation of Economic Co-operation and Development (OECD). Data are for 2003.

Measuring Up 20 0 6

Sources: Jobs for the Future, Organisation of Economic Co-operation and Development (OECD), Education at a Glance 2006; Data were analyzed by the National Center for Higher Education Management Systems and the Delta Project on Postsecondary Costs for Making Opportunity Affordable, an initiative supported by Lumina Foundation for Education

Differences in College Attainm ent

Sources: Jobs for the Future; U.S. Bureau of Labor Statistics; Data were analyzed by the National Center for Higher Education Management Systems and the Delta Project on Postsecondary Costs for Making Opportunity Affordable, an initiative supported by Lumina Foundation for Education

Changing Workforce Needs

The Degree Gap

Sources: Jobs for the Future; U.S. Census Bureau: 2005 American Community Survey; Data were analyzed by the National Center for Higher Education Management Systems and the Delta Project on Postsecondary Costs for Making Opportunity Affordable, an initiative supported by Lumina Foundation for Education

New Jersey

Sources: The College Board; Snyder et al., 2006; U.S. Census Bureau, 2005

College Enrollm ent by Race/ Ethnicity

Sources: Jobs for the Future; U.S. Census Bureau 2005 ACS, Population Projections, NCES, IPEDS Completions Survey; Data were analyzed by the National Center for Higher Education Management Systems and the Delta Project on Postsecondary Costs for Making Opportunity Affordable, an initiative supported by Lumina Foundation for Education

The Degree Gap

Sources: Jobs for the Future; U.S. Bureau of Labor Statistics; The College Board; Data were analyzed by the National Center for Higher Education Management Systems and the Delta Project on Postsecondary Costs for Making Opportunity Affordable, an initiative supported by Lumina Foundation for Education

The Price of College is Going Up

• 5%

0% 5% 10% 15% 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007

% Change State Approps % Change Tuition and Fees

Tuition Increases Com pared to Changes in State Appropriations

* Moody’s rated public institutions

Sources: Moody’s Investors Service; Center for the Study of Education Policy, Illinois State University; The College Board

New Jersey Higher Education Spending

Source: Chronicle of Higher Education

• FY 2007 - $1.97 billion - operating expenses
• FY 2006 - $401 million - student aid
• FY 2005 - $867 million - research and development

State Support is Declining

Source: New Jersey Association of State Colleges and Universities; Governor’s Budget Recommendations; US Department of Labor’s CPI Detailed Report

Adjusted for CPI

$211,394,0 0 0 $210 ,562,0 0 0

2.9 1.09 1.51 61 2,792

All Privates

3.4 .71 1.35 67 3,772

NJ Privates

3 1.01 1.47 63 2,788

All Privates

3.8 3.1 3.4 Annual Operating Margin (%) .87 1.17 .89 Expendable Resources to Operations 1.43 1.66 1.56 Expendable Resources to Direct Debt 76 57 70 Primary Selectivity (%) 3,892 2,801 4,164 Median FTE Enrollment (number may be estimated)

NJ Privates All Privates NJ Privates

2006 2005

Private Institutions

Source: Moody’s Investors Service

2004

2.2 .4 .9 75.2 13,570

All Publics

6.5 .41 .4 50.8 6,558

NJ Publics

2 .4 1 74.5 13,756

All Publics

6.5 1.9 3.4 Annual Operating Margin (%) .41 .41 .37 Expendable Resources to Operations .3 .9 .4 Expendable Resources to Direct Debt 50 72.6 53.2 Primary Selectivity (%) 6,745 14,857 6,896 Median FTE Enrollment (number may be estimated)

NJ Publics All Publics NJ Publics

2006 2005

Public Institutions

Source: Moody’s Investors Service

2004

Moody’s 20 0 7 Industry Outlook - Stable

Strengths – Publics

• Strong student demand
• Revenue growth (tuition)
• Growing financial resources
• Operating performance remains mildly

positive

Source: Moody’s Investors Service

* Moody’s rated public institutions

Moody’s 20 0 7 Industry Outlook - Stable

Strengths – Privates

• Modest enrollment growth
• Strong growth in tuition revenue
• Growing financial resources
• Positive investment performance and

fund raising

Positive Investm ent Perform ance In Recent Years Restored Balance Sheets; Largest Outperform the Pack

16% 17% 20% 18% 11% 13%

• 4%
• 6%

3% 15% 9% 11% 16%

• 10%
• 5%

0% 5% 10% 15% 20% 25% 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 EST

Average Annual I nvestment Return

Source: NACUBO Endow ment Study * 2007 Estimate by Moodys

Source: Moody’s Investors Service

“One Ph.D. will generate em ploym ent of 10 engineers. Ten engineers will generate em ploym ent for 150 technicians and skilled workers.”

Jesse Hobson, Former President of the Armour Research Foundation and the Stanford Research Institute

Quoted in A Call to Action by The Citizens Committee for Higher Education in New Jersey, Princeton, New Jersey, January 1966

“The nations, states, and communities that are most successful in developing human talent, particularly college-level knowledge and skills, will enjoy significant advantages. Conversely, those nations, states, and communities that fall behind educationally are likely also to fall behind in competing for good jobs and in achieving or maintaining high standards of living.”

“Measuring Up – 2006” The National Center for Public Policy and Higher Education

Thank You