During 2020, the University entered into a finance purchase for an energy management system. The obligation has an interest rate of 2.7095% and requires annual payments of principal and interest beginning in fiscal 2022 through 2036. The agreement grants a continuing first priority security interest in the equipment. In an event of a default, the lessor can accelerate the repayment of the lease payments. The obligation will be paid with guaranteed energy savings.
The capitalized costs of assets acquired through the financed purchases included in the above schedule was $16,693,621 with accumulated amortization of $269,940 as of June 30, 2022. These assets are pledged as collateral in an event of default.
The principal and interest repayment requirements relating to the energy management system obligation payable at June 30, 2022 are as follows:
Year ended
30-June Principal Interest Total
2023 $ 470,414 $ 206,092 $ 676,506
2024 960,036 392,978 1,353,014
2025 986,224 366,790 1,353,014
2026 1,013,127 339,887 1,353,014
2027 1,040,764 312,250 1,353,014
2028-2036 10,741,967 1,435,164 12,177,131
Total $ 15,212,532 $ 3,053,161 $ 18,265,693
The 2021 Certificates consist of 13 serial bonds with maturity dates ranging from November 1, 2024, to November 1, 2036, yield rate ranging from 0.55% to 1.91% and 5 term certificates with maturity dates ranging from November 1, 2038, to November 1, 2056, yield rates ranging from 2.64% to 3.29%. The pricing resulted in a 2.92% true interest cost. The debt service on the 2021 Certificates will be funded by monthly lease payments by the University to the Trustee through November 2056.
The Certificates of Participation (COPs) are secured by certain real estate and the projects located on that real estate, the lease payments to KSU Campus Housing, LLC. (the Company) and a pledge of general receipts. The University has entered into a lease purchase arrangement whereby on the termination of the stated lease, title to the land and buildings will be conveyed absolutely to the University. As a result, this is not reported under GASB Statement 87, Leases. The University has the right to acquire the entire title to the facility on or after November 1, 2031.
43.