Bond Sale Will Pay for Power Plant
The bond sale, which officials predict will occur within the next six months, is expected to end nearly a decade of MATEP-related financial headaches for Harvard. Since construction began in 1974, funded by operating capital, the cost of the plant has risen more than 10 times the original estimate of about $20 million, and a variety of refinancing schemes have collapsed because of the nation's economic climate and numerous administrative delays.
Harvard floated a similar package of bonds two months ago to pay for a handful of ongoing construction subjects, including renovations of the Houses and the Biology laboratories The sale, at $245 million, was the largest ever by an educational institution.
Combined with this package and four earlier bond issues, the MATEP series will put Harvard in debt by about $600 million, to be paid off during the next 25 to 30 years.
By refinancing the plant some five years after construction. Harvard will be taking advantage of present low-market rates to recoup the original MATEP expenditure. The laws covering the issue will also enable Harvard to re-invest some of the money in its endowment and also to help pay off older bond issues. Harvard treasurer George Putnam '49 said recentls.
Ever since MATEP was conceived more than a decade ago, Harvard financial planners have expected to replace the operating funds that were diverted to construct the plant with a low-interest borrowing scheme such as the upcoming issue.
The plant currently provides steam and chilled water to 12 Harvard-affiliated hospitals in Boston. Governmental approval for MATEP to generate electricity, its chief money-saving function, has so far been stalled because of environmental concerns.
Harvard and other Massachusetts universities are able to sell tax-free bonds unver the guidelines of the state's Health and Educational Facilities Authority. Investors who buy the bonds are in essence lending the University a large sum of money, to be repaid with interest compounded over a long period, usually about 30 years.
The December bond issue received an AAA rating-the highest possible-and sold out in a day. An official at Goldman Sachs, the New York brokerage firm that managed the sale, yesterday predicted the MATEP issue will also receive the top rating.
Harvard officials estimated that the MATEP sale will raise $150-250 million.
He is not a stereotypical Harvard law professor. Only 34 years old, Lopez is an active advisor to the Los Angeles Chicano community on legal matters, and is outspoken in his criticism of legal education.
But he does have the necessary qualifications-University of Southern California undergraduates, Harvard Law School, California District Court clerkship for a year, private practice in San Diego for three years, and a professorship at UCLA Law School for the past five years. Two years ago he was voted the outstanding teacher in the eight UCLA graduate schools, and he has recently written an influential paper on immigration law.
In addition, Lopez is among the most popular teachers at UCLA-"intense, but with a sense of humor," Bruce C. Doering, president of the UCLA Law Students Bar Association, said last week. His civil rights course in particular gets rave reviews from students, so much so that it has a waiting list for enrollment, Doering added