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Capital Bank Program

Vanderbilt utilizes an internal lending program, or capital bank, under which it provides funding for projects across schools and divisions under the guidance of the Vice Chancellor for Finance and CFO. The university utilizes a central debt financing pool to help support the university´s capital needs. The benefits of this program include:

  • Providing access to capital for internal borrowers and permitting the university to fund capital needs on a portfolio basis;
  • Supporting lower overall average internal borrowing costs while minimizing volatility in interest rates; and
  • Achieving equity for borrowers through a blended rate.

The capital bank can access funds from a variety of sources to originate loans to divisions. The university manages its funding sources on a portfolio basis and, therefore, payments from divisions are not tied directly to a particular source of funds (e.g., a particular bond issue). Nonetheless, for federal tax and reimbursement requirements, actual debt service for certain capital projects is tracked for reporting purposes.