PROVIDENCE – Brown University plans to borrow $125 million in order to stockpile cash and pay for renovations, Bloomberg News reported yesterday.

Beppie Huidekoper, the school’s executive vice president for finance and administration, told Bloomberg the university plans to use $25 million for renovations, including a data center, and hold the remaining $100 million as a cash reserve.

The decision follows a 24.1 percent decline in the value of Brown’s endowment during the 11 months through May 31, when it stood at about $2 billion, according to Standard & Poor’s Ratings Service. That made it the smallest endowment in the eight-member Ivy League, according to the National Association of College & University Business Officers.

Officials at Brown said in June the school must cut its operating budget for the 2010-11 fiscal year by an additional 5.5 percent, or $30 million, on top of cuts that were already made for the new fiscal year, which began July 1.

Brown eliminated 67 jobs in the current fiscal year, a bit more than half of which were cut through layoffs.

The $125 million in new debt will be taken on sometime in the next two or three months by selling $100 million in taxable bonds and $25 million in tax-exempt bonds, Huidekoper said.

“The plan is to borrow the funds for 10 years,” she told Bloomberg in an e-mail. “If within the next 10 years the markets have another significant drop and/or credit markets seize at a time when we need access to capital, we will have these funds available.”

The additional borrowing will increase Brown’s total debt by 25 percent to $618 million, up from $493 million on June 30, Standard & Poor’s said.

The ratings agency assigned the university’s debt its second-highest credit rating of AA+ due to the school’s continued appeal, its graduation rate and its recent success in completing a $1.4 billion fundraising drive.

However, S&P also warned: “Additional issuance of long-term debt for working capital could have a negative rating implication” for Brown.

Additional information is available at Brown.edu.