Johns Hopkins Gazette: October 27, 1997

In Brief

Refinancing long-term debt to save university millions

The university has refinanced its long-term tax-exempt debt at rates that will cut its costs by $52 million over the next 21 years, an average of about $2.5 million a year.

On Oct. 16, the university--working through the Maryland Health and Higher Education Facilities Authority--sold $193 million in bonds at a net interest cost of 5.34 percent. The sale was carried out by Goldman, Sachs & Co.; Legg Mason Wood Walker Inc.; Ferris, Baker, Watts Inc.; and The Chapman Co. The bonds were rated AA- by Standard and Poor's and Aa2 by Moody's Investors Service.

The transaction was the biggest of its kind ever by the university, said John J. Lordan, interim senior vice president for administration.

"This is the biggest in terms of savings, and in terms of securing long-term, low-interest financing for an extensive list of already completed capital projects," Lordan said. The projects covered include student residence halls at Homewood, practice rooms at the Peabody Institute, an AIDS laboratory at the School of Hygiene and Public Health and basic science laboratories and MRI facilities at the School of Medicine.

"Almost all academic divisions will see the impact of this refinancing on their bottom lines beginning in fiscal 1998," Lordan said.

The transaction was unusual in university financial circles in that it was an "accelerated pricing" of bonds that cannot actually be delivered until April 1998. Under the laws governing tax-exempt debt, the university can issue new bonds to "call" old bonds that were issued at a higher rate, but the new bonds can be sold no more than 90 days prior to the "call date." The earliest call date for Hopkins' old bonds is July 1, 1998.

"By structuring the transaction the way we did," said William E. Snow, the university's treasurer, "we were able to lock in today's low rates, rather than risking a deterioration in the market between now and April. Obviously, interest rates could get even better by April, but we believed--and a trustee oversight committee agreed--that there is a lot more room for rates to rise than to decline. With $52 million on the table, this was no time to get greedy."

In fact, almost immediately after the sale of the Hopkins bonds on Oct. 16, interest rates rose slightly, and they rose again the next day.

"It looks like we may have done this deal on the best hour of the best day the market has seen for a long time," Lordan said.
--Dennis O'Shea

Media cited as source of exposure to violence

A questionnaire answered by students at a Baltimore County high school shows that nearly 10 percent of them have received psychological help to deal with difficulties related to exposure to violence in one or more of the three major areas of their lives: the media, their home and/or community, and school. A majority reported a higher degree of exposure to violence in the media than in the home. Girls in single-parent households were the most likely to have been affected by such exposure.

Researchers from the Johns Hopkins Children's Center presented their findings Oct. 16 at the 44th annual meeting of the American Academy of Child and Adolescent Psychiatry in Toronto.

This study is the first to use a single instrument to delineate the varying degrees to which an adolescent is exposed to violence in the largest arenas of his or her life: the media, the home/community and the school. The Hopkins researchers reasoned that knowledge of the specific cause of such trauma would result in better treatment of its psychological aftermath. They developed a questionnaire to identify the sources of violence in adolescents' lives and to enable teachers and clinicians to identify children at risk of traumatic reaction.

To test their questionnaire, the researchers chose an ethnically and racially diverse group of adolescents in a Baltimore County high school. Two-thirds of the students lived in two-parent families. To ensure confidentiality, the students did not give their names.

"We all knew what happens to children in the inner cities," says lead author Paramjit Kaur Joshi, associate professor of psychiatry at the Johns Hopkins Children's Center. "We wanted to know how much of an issue violence is in the lives of American children outside those areas. Once we knew how they were being exposed, we could decide how to help them, their parents and schools decrease the levels of violence in their lives and cope with the results."

All the students who reported seeking psychological help cited the media as their source of exposure to violence. Most said they were on psychotropic medication, and 40 percent of them reported such symptoms as anxiety, lethargy, sleep problems, somatic complaints and fear.
--Wendy Mullins

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