Girard College’s Finances Handcuffed by Rate Swaps: Muni Credit
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Girard College, which for 166 years has schooled and housed low-income students in Philadelphia in a walled campus by decree of its namesake founder, is paying a premium in the bond market after Wall Street deals backfired.
The school entered into sophisticated financial contracts more than a decade ago to protect against rising interest rates. Now, those swaps are locking Girard into above-market financing costs on about $59 million of debt just as the school seeks to cut expenses after its endowment shrank 25 percent in almost seven years.