Bangkok--16 Mar--Standard & Poor's
Standard & Poor's Ratings Services raised its long-term rating on Colorado Educational and Cultural Facilities Authority's debt, issued on behalf of the University of Denver (DU), Colo. to 'A+' from 'A'. The rating outlook is stable.
The upgrade is based on Standard & Poor's assessment of the college's continued strong demand trends and healthy financial profile, including continued strong operating surpluses and adequate levels of financial resources, during an otherwise challenging economic environment.
The revised rating reflects Standard & Poor's view of UD's history of strong operating surpluses, solid demand and increasing levels of enrollment, robust financial resources for the rating category; and a moderate debt burden of approximately 2.8%.
Partially offsetting these rating strengths is what Standard & Poor's considers a somewhat high level of dependence on student tuition and fees for the rating category at 84% for fiscal 2009; a moderate endowment for the rating category at $276 million as of Jan. 31, 2010, and lack of formal annual fund; and relatively low matriculation rate for the rating category with 60% of students coming from out of state.
"The stable outlook reflects our expectation that UD will continue to report strong operational surpluses and maintain its solid demand profile and financial resources as well as conduct a successful capital campaign," said Standard & Poor's credit analyst Blake Cullimore. "We also expect that any additional debt will be commensurate with a growth in financial resources," said Mr. Cullimore.
Standard & Poor's said that any planned leveling of enrollment that results in weak operations and a further decline in financial resources would be cause for concern.
The university's debt of $143 million is currently structured as fixed-rate debt. The maximum annual debt service is approximately $11.6 million, or a low 2.8% of budget. The university has indicated it has no near-term debt plans.
RELATED RESEARCH
USPF Criteria: Higher Education, June 19, 2007
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Media Contact:
Ana Sandoval, New York (1) 212-438-5095,
[email protected]
Analyst Contacts:
Blake Cullimore, Boston (1) 617-530-8312
Marc Savaria, Boston (1) 617-530-8315