Annual Financial Report 2024 2025

Virginia Tech Financial Report 2024-2025

14. Long-term Debt Defeasance Current Year

During fiscal year 2025, the university issued $36,185,000 of 9(d) revenue bonds to refund $37,736,000 of 9(d) revenue bonds. The university and the Commonwealth of Virginia, on behalf of the university, also issued $4,171,000 of 9(c) general obligations bonds to refund $4,319,000 of 9(c) general obligation bonds. The resulting net gain of $1,699,000 will be amortized over the life of the new debt. For financial reporting purposes, these bonds are considered an in-substance defeasance and have therefore been removed from the long-term debt payable presented in the Statement of Net Position. The assets in escrow have similarly been excluded. The details of each refunded debt issue are presented below.

Long-term Debt Defeasance Debt issues refunded as of June 30, 2025

Reduction

(Increase) in Reduction Debt Service

(all dollars in thousands)

Debt

Refunding Debt Issued

Accounting Gain (Loss)

Present

(Increase) in

Discounted at

Refunded

Value Rate Debt Service Present Value

Section 9(d) revenue bonds, Series 2025 Series 2015A, issued $51,425

$

31,145 $

28,400 $

2,745

2.86% $

1,208 $

1,053

Series 2015B, issued $510 Series 2015C, issued $3,280 Series 2015D, issued $4,390 Premiums (discounts)

260

225

35

2.86% 2.86% 2.86%

15 40 58

10 34 50

1,905 2,600 1,826

1,735 2,365 3,868

170 235

(2,042)

Other accounting activity related to debt refunding

-

(408)

408

Total for 9(d) revenue bonds

37,736

36,185

1,551

1,321

1,147

Section 9(c) general obligation revenue bonds, Series 2025B Series 2015B, issued $10,671

3,832

3,690

142

3.91% 3.91%

169

157

Series 2015B, issued $921 Premiums (discounts)

324 575

315 174

9

11

10

401

Other accounting activity related to debt refunding Total for 9(c) general obligation revenue bonds

(412)

(8)

(404)

4,319 42,055

4,171

148

180

167

$

40,356 $

1,699

$

1,501 $

1,314

Total for all long-term debt

Debt issuance costs

416

$

40,772

Total refunding debt issued

Prior Years In prior fiscal years, the university excluded from its financial statements the assets in escrow and the debt payable which were defeased in-substance in accordance with GASB Statement 7, Advance Refundings Resulting in the Defeasance of Debt . For the year ending June 30, 2025, there were $7,116,000 in bonds and notes outstanding considered defeased. GASB Statement 65, Items Previously Reported as Assets and Liabilities , reclassifies losses and gains on defeased debt to deferred outflows of resources or deferred inflows of resources, respectively. The tables below provide detail on the unamortized gains and losses included in the deferred outflows of resources and deferred inflows of resources by bond category for defeased outstanding debt from prior years. Deferred Outflows for Debt Defeasance As of June 30, 2025 (all dollars in thousands) Beginning Ending Balance Additions Retirements Balance Bonds payable Section 9(c) general obligation revenue bonds $ 641 $ - $ 559 $ 82 Section 9(d) revenue bonds 471 4 82 393 Notes payable 1,318 - 240 1,078 Total deferred outflows for debt defeasance $ 2,430 $ 4 $ 881 $ 1,553

Deferred Inflows for Debt Defeasance As of June 30, 2025 (all dollars in thousands) Bonds payable Section 9(c) general obligation revenue bonds

Beginning Balance

Ending Balance

Additions

Retirements

$

386 $

148 $

69 $

465

Section 9(d) revenue bonds

103 725

1,555

176 111

1,482

Notes payable

-

614

$

1,214 $

1,703 $

356 $

2,561

Total deferred inflows for debt defeasance

37