Gonzaga University says $42.5 million in tax-exempt revenue bonds have been issued for it by the Washington Higher Education Facilities Authority to help it refinance variable-rate debt it had taken on to buy or build facilities on and near its campus here.

The authority is a state agency that approves tax-exempt revenue bonds to help minimize the financing costs of nonprofit, independent colleges and universities in the state.

The colleges and universities use bond proceeds primarily for refinancing outstanding debt; for remodeling, renovating, or constructing facilities; and for equipment purchases.

Last year, the authority issued about $47.5 million in variable-rate bonds on behalf of Gonzaga, which Gonzaga will refinance with the fixed-rate bonds this year, says Chuck Murphy, Gonzaga's vice president for finance.

The previous bonds, called auction-rate bonds, depended on short-term investors buying the bonds weekly at variable rates, but when the auction-rate bond market failed because investors lost confidence in the liquidity of such bonds, it became necessary to refinance that debt, Murphy says.

Some of the projects funded with the bonds include: acquisition and construction of student housing, including complexes at 224 E. Sharp and 118 E. Desmet; acquisition of a building at 102 E. Boone; acquisition of warehouse facilities at 124 E. Sinto; acquisition of Marian Hall at 1015 E. Boone; construction of the McCarthey Athletic Center and the baseball and soccer facilities on campus; and addition of 24,500 square feet to the school's engineering building.

The authority also issued another series of bonds last year for Gonzaga, at a fixed rate, and the proceeds of those bonds were used to repay a portion of a previous bond issue as part of Gonzaga's ongoing debt restructuring program, the authority says.