The University is looking to take in up to $200 million in new debt to finance a number of construction projects and renovations around the city.

Among the funded projects are the construction of the upcoming 265,000-square-foot William Eckhardt Research Center, renovations to the Booth School of Business’s Gleacher Center, and the Lab School campuses on 59th Street and Stony Island Avenue, and purchasing new property near Lake Calumet.

Steve Kloehn, a University spokesperson, said that universities routinely issue debt to finance both major projects and normal operating costs.

“The issuance of debt is not necessarily connected to a single project. I don’t want to create a false linkage there in the timing [of the proposal],” Kloehn said. “The issuance of debt is a fairly routine matter, at fairly routine intervals.”

The debt will be issued in tax-exempt municipal bonds as part of a package of new and refunded financing that may total as much as $480 million according to a financing summary compiled by the Illinois Finance Authority (IFA), a self-funded state agency that assists businesses and non-profit corporations to secure financing.

Bank of America and its financial management subsidiary, Merrill Lynch, are underwriting the University’s proposal to the state, which was submitted October 11 and received a positive recommendation from the IFA review committee.

The bonds are expected to be issued in the first quarter of the upcoming fiscal year.

University Chief Financial Officer Nim Chinniah was unable to be reached in time to comment.

The bonds would mature in 40 years, with interest rates “based on evaluation of market conditions by the University and its financing team,” the IFA documents indicated.

The University has a Moody’s short-term debt rating of P-1, defined as a “superior ability to repay short-term debt obligation,” the highest on the P-scale. To repay the bonds, the University would bring to bear a combination of long-term loans, philanthropy, and operating funds.

The University received an 18.9 percent return on its investments in fiscal year 2010, earning $500 million and putting its endowment just over $1 billion short of its all-time high in 2008.

The University’s total debt also jumped 12.5 percent in fiscal year 2010 to $2.7 billion from $2.4 billion in fiscal year 2009, according to an October 11 Crain’s Business Chicago article.

This past April, the IFA recommended for final approval the University of Chicago Medical Center’s proposal for up to $200 million in debt to finance the acquisition and construction of a 10-story “New Hospital Pavilion” and a number of other expenditures.

—Additional reporting by Eliana Polimeni