The University of Arkansas Board of Trustees this afternoon approved a loan deal of up to $ 19.1 million, which it says will help Razorback’s sports department perform of debt payments this year and next year on facility bond issues.
The loan is a way to refinance annual debt payments and is also seen as part of other cost-cutting efforts being undertaken due to the pandemic’s effects on athletics, AU officials told the board of directors.
Hunter Yurachek, athletic director at the University of Arkansas, Fayetteville, told board members the department now expects to see “at least” a $ 20 million reduction in revenue this year by compared to the $ 124.6 million initially planned for the year.
“Deficits and additional revenues can be anticipated if additional events are canceled or if other adjustments need to be made to the capacity levels of our sites,” said Yurachek.
The loan, with Regions Bank and its affiliates, will have a maximum interest rate of 2% per annum and must be repaid by September 15, 2028.
Clayton Hamilton, UA’s chief financial officer, said the loan “will not increase the sports department’s total debt or extend the number of years of outstanding debt beyond that. who is currently 17 years old “.
Hamilton said the debt payments totaled about $ 19 million. The loan must be repaid “interest only” during the first three years, the principal being repaid over five years thereafter.
The resolution was approved by the board of directors without any opposition.
University officials said last month that most sports department employees would see pay cuts starting September 1 for expected total savings of around $ 3 million.
A new football schedule in place due to the pandemic sees the Razorbacks playing five home games in Fayetteville, up from seven previously. The university also said attendance would be limited to between 16,000 and 17,000 at a stadium that can accommodate 76,412 seats.