As previously mentioned, the next maturity of external debt is June 3, 2019, related to the MIWSFPA loan of $18 million financed in fiscal 2014-15. The amount due at maturity will be $14.4 million. Other future debt maturities can be found in the audited financial statements of the University. The requirement for the debt reduction strategy is supported by Brock’s key debt metrics found in Figure 46, which also compare these metrics to that of the median and average of other universities in our comprehensive category. Figure 46: Financial health metrics Brock (1) April 2018 April 2017
TREASURY
Primary reserve ratio
2019-20 Budget Report
82
Median (2) April 2018 April 2017 (2)
17.1%
14.6%
30.9%
34.7%
Debt burden ratio
2.9%
3.0%
2.6%
2.6%
Interest burden %
2.4%
2.5%
1.6%
1.7%
Interest coverage
4.23
3.70
8.51
7.89
39.3%
31.9%
133.7%
154.5%
Viability ratio
(1) Certain Brock 2018 metrics have been adjusted for reclassifications. (2) Calculated using financial information from 14 other comprehensive universities. Certain 2017 metrics have been updated due to revisions in certain universities’ financial statements.
Appendix G provides full definitions of each financial health metric. The following details a high-level explanation of the debt metrics: 1. The primary reserve ratio refers to the amount of cash available to cover operations. It identifies at April 2018 Brock has approximately 62 days of expendable reserves. 2. The next two ratios describe how Brock utilizes a greater proportion of its annual operating expense to fund debt obligations. 3. The interest coverage ratio measures the ability to fund interest charges from cash generated through operations. It remains above the guidance of 2.00 set by the Board of Trustees and above the ratio of 2.50 considered to be the standard by the University’s credit rating agency, DBRS, for Brock’s current credit rating of A high. 4. The viability ratio is essentially how much of the institution’s debt could be paid off with expendable resources. The average institution in our category could pay almost all its debt with expendable resources, whereas Brock can only pay off 39 per cent and, therefore, is vulnerable to unplanned events. These metrics highlight the need to pay down the debt so, in time, we can reduce the debt and interest burden on the University.