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The latest news and analysis on the Montlake Dawgs.

July 29, 2011 at 10:47 AM

UW officials say possible credit downgrade won’t halt Husky Stadium renovation

A few of you saw this story yesterday on Moody’s Investors Service warning that UW could face a possible credit downgrade because of the federal government stalemate over the debt ceiling and asked an obvious question — could that impact the planned renovation of Husky Stadium?

Norm Arkans, UW’s associate vice president for media relations and communications, says the answer is that while it could potentially raise the cost of the project, it won’t stop it.

“No, no, no,” he said, when asked if there was any way this could delay or halt the planned November beginning of the projected $250 million renovation.

As for what it might do to the cost, Arkans says that’s unknowable since Moody’s is only saying at the moment that UW could face a downgrade.

“It doesn’t mean it’s automatically a downgrade, just that that they are going to review it,” Arkans said.

Arkans also said that the way the school issues its bonds helps mitigate the impact this might have on any single project.

“We issue bonds periodically depending on how the market is doing, and we have a pool of money that we internally lend to different projects,” he said. “So we wouldn’t be out on the bond market issuing bonds specifically for the stadium, but just as part of the general bond sale that we do for a variety of our projects.”

Because of that, Arkans says it’s hard to speculate what a downgrade would mean for the Husky Stadium renovation — or if it would mean anything.

“It’s really hard to say,” he said. “If it’s downgraded, there could be a slight increase in cost to the University’s borrowing. But whether that would end up costing the stadium more is just too far into the future and too hard to predict. There’s a potential that it could increase the cost of borrowing. But there’s not a direct link, necessarily.”

Whatever happens, Arkans reiterated the timing of the renovation won’t be impacted.

“Right now, the cost of borrowing has been pretty good because of our rating and the markets, and those costs could creep up,” he said. “But that’s just part of the cost of doing business.”

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