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Agencies give high marks to OHIO credit ratings

Jun 9, 2009  

Moody's Investor's Service and Standard & Poor's Rating Services -- two of the world's top credit rating agencies -- have awarded Ohio University strong A1 and A+ ratings, respectively, on its upcoming $28.3 million bond issuance to finance the new Student Information System and network upgrades. They also affirmed the same ratings for all outstanding debt at the university.

The agencies cited Ohio University's stable financial outlook, a strong market position within the state, manageable levels of debt and stable enrollment projections. 

According to Associate Vice President for Finance Mike Angelini, a strong credit rating is important because it enabled the university not only to secure lower interest rates on the SIS and network upgrade bonds, but also to maintain stability for its relatively small percentage of variable rate debt.

"In many cases, the first thing investors look at are the credit ratings," Angelini said. "Generally speaking, the lower the credit ratings, the higher the rates on the bonds -- or the cost to the university."

Angelini also said he was pleased that the rating agencies confirmed the A1 and A+ ratings during such an unstable economic environment.

"Both rating agencies were particularly pleased with improvements made to the University's balance sheet over the recent past, efforts in balancing the budget this year, and the institution's ability to maintain strong enrollment," he said.

However, he cautioned that the credit rating agencies could decide to downgrade the university's overall ratings if certain economic measures, particularly at the state level, take a turn for the worse. 

"With the economy as fragile as it is, the slightest reduction in state funding, impairment to our balance sheet, or decline in enrollment could prompt the rating agencies to reassess the outlook of the institution.

"While we maintained our credit rating, we are not out of the woods yet," he said.

Among other public universities in the state, Ohio University has one of the top credit ratings, on par with Miami University and behind only Ohio State University.



Related Links
Office of Information Technology:  http://www.ohio.edu/technology/index.cfm 

Published: Jun 9, 2009 3:04 PM  

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