Top U.S. universities, whose endowments have been hit hard by fallout from the global financial crisis, are selling bonds to raise money to shore up their financial positions.

Stanford University became the latest top university to sell taxable debt to make up for recent losses in its endowment, the third largest of any U.S. university.

Stanford on Thursday sold $1 billion worth of debt in a sale led by Goldman Sachs, JP Morgan, and Morgan Stanley.

"It's insurance for us in case the economy gets worse," said Lisa Lapin, a spokeswoman for the university.

The university sees the proceeds from its bond sale as a way to pad its cash position, its chief financial officer, Randy Livingston, said. Although Stanford has no immediate plans to use the cash -- it will hold the cash in a separate investment fund -- it was a good time to sell bonds.

"We issued the debt last week because the bond market was favorable. Although we don't have a pressing need for the cash now, we did not want to find ourselves in a future situation where we urgently need the cash but the bond market is closed," said Livingston.