Loyola Inc.

Kudos for campus finance

The Treasury does it. So do states and corporations. Now financially pinched private universities are catching on. Chicago's Roman Catholic Loyola University has become the first such institution to raise cash by issuing lOUs in the crackling-hot short-term money market. Needing building funds, Loyola issued a total of $53.5 million in tax-exempt corporate paper for terms ranging from 15 to 93 days at an average interest cost of 3.86%. Loyola intends to keep reissuing the paper until long-term interest rates (now as high as 9 1/2% for 30 year tax-exempts) decline.

Besides gaining a lower price for its cash Loyola has won kudos. Standard & Poor's, the investment-rating firm, now appraises the short-term debt of nonprofit institutions. It gives the Loyola debt its top grade: A1.

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