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Boise State University, ID — Moody’s assigns Aa3 to Boise State University, ID’s General

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Rating Action: Moody’s assigns Aa3 to Boise State University, ID’s General Revenue Refunding Bonds, Series 2022A (Taxable); outlook is stableGlobal Credit Research – 08 Feb 2022New York, February 08, 2022 — Moody’s Investors Service has assigned a Aa3 to the Boise State University, ID’s upcoming sale of up to $150 million in General Revenue Refunding Bonds, Series 2022A (Taxable). We maintain the University’s Aa3 issuer rating and the Aa3 on approximately $220 million of parity debt. The outlook is stable.RATINGS RATIONALEThe assignment of the Aa3 rating reflects Boise State University’s favorable market position as a comprehensive urban public university. It is the largest public university for the State of Idaho (Aaa stable), and is able to attract a significant amount of non-resident students, bolstering overall scale and revenue growth. With very good financial policy and strategy, operating performance is consistently sound, evidenced by EBIDA margins averaging over 12% pre-pandemic. Wealth and liquidity are comparatively strong, with total cash and investments of over $466 million as of fiscal 2021, providing a stable buffer for growing operations and debt. Total leverage, including direct debt and pensions, is manageable.Although enrollment softened during fall 2020, driven by the pandemic, total full time equivalent enrollment has since returned to pre-pandemic levels, and enrollment is expected to increase again in fall 2022. Despite a downturn in auxiliary revenues during fiscal 2021, the university benefited from state and federal COVID relief funding while simultaneously curbing expenses, resulting in a higher than average 16% EBIDA margin. Fiscal 2022 is on track to be another positive year.There is no rating distinction between the issuer and senior debt rating given the broadness of pledged revenue, which provides ample coverage of outstanding and proposed annual debt service.RATING OUTLOOKThe stable outlook reflects Moody’s expectations of continued steady enrollment growth while maintaining positive operating performance and growing wealth and liquidity.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING- Substantial increase in total wealth and liquidity- Material growth in the overall size and scope of the university, including total operating revenue, enrollment, and research profileFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING- Sustained deterioration of operating performance and cash flow margins- Material enrollment declines and/or lower net tuition revenue- Notable declines in operating appropriations from the State of IdahoLEGAL SECURITYThe university’s outstanding and anticipated general revenue bonds are secured by Pledged Revenues of the Boise State University, which include tuition and student fees, auxiliary revenue and other specified revenue. The university has covenanted to establish and maintain Pledged Revenues greater than 1.1 times annual debt service. Fiscal 2021 Pledged Revenues of $193.3 million provide approximately 9.5 times 2022 annual debt service ($20.4 million), inclusive of the series 2022A bonds.USE OF PROCEEDSThe proceeds of the series 2022A Bonds will be used to advance refunding existing maturities for net present value savings.PROFILELocated in the capital city of Idaho, Boise State University (BSU) is the largest comprehensive public university in the state. In fiscal 2021, BSU generated operating revenue of $440.4 million and enrolled 17,640 full-time equivalent (FTE) students (Fall 2021).METHODOLOGYThe principal methodology used in this rating was Higher Education Methodology published in August 2021 and available at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1257002. Alternatively, please see the Rating Methodologies page on www.moodys.com for a copy of this methodology.REGULATORY DISCLOSURESFor further specification of Moody’s key rating assumptions and sensitivity analysis, see the sections Methodology Assumptions and Sensitivity to Assumptions in the disclosure form. Moody’s Rating Symbols and Definitions can be found at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For ratings issued on a program, series, category/class of debt or security this announcement provides certain regulatory disclosures in relation to each rating of a subsequently issued bond or note of the same series, category/class of debt, security or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordance with Moody’s rating practices. For ratings issued on a support provider, this announcement provides certain regulatory disclosures in relation to the credit rating action on the support provider and in relation to each particular credit rating action for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings, this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and in relation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case where the transaction structure and terms have not changed prior to the assignment of the definitive rating in a manner that would have affected the rating. For further information please see the ratings tab on the issuer/entity page for the respective issuer on www.moodys.com.The rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.This rating is solicited. Please refer to Moody’s Policy for Designating and Assigning Unsolicited Credit Ratings available on its website www.moodys.com.Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related rating outlook or rating review.Moody’s general principles for assessing environmental, social and governance (ESG) risks in our credit analysis can be found at http://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_1288235.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the EU and is endorsed by Moody’s Deutschland GmbH, An der Welle 5, Frankfurt am Main 60322, Germany, in accordance with Art.4 paragraph 3 of the Regulation (EC) No 1060/2009 on Credit Rating Agencies. Further information on the EU endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.The Global Scale Credit Rating on this Credit Rating Announcement was issued by one of Moody’s affiliates outside the UK and is endorsed by Moody’s Investors Service Limited, One Canada Square, Canary Wharf, London E14 5FA under the law applicable to credit rating agencies in the UK. Further information on the UK endorsement status and on the Moody’s office that issued the credit rating is available on www.moodys.com.Please see www.moodys.com for any updates on changes to the lead rating analyst and to the Moody’s legal entity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com for additional regulatory disclosures for each credit rating. Heather Correia Lead Analyst Higher Education Moody’s Investors Service, Inc. 7 World Trade Center 250 Greenwich Street New York 10007 JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Florence Zeman Additional Contact Housing JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 Releasing Office: Moody’s Investors Service, Inc. 250 Greenwich Street New York, NY 10007 U.S.A JOURNALISTS: 1 212 553 0376 Client Service: 1 212 553 1653 © 2022 Moody’s Corporation, Moody’s Investors Service, Inc., Moody’s Analytics, Inc. and/or their licensors and affiliates (collectively, “MOODY’S”). All rights reserved.CREDIT RATINGS ISSUED BY MOODY’S CREDIT RATINGS AFFILIATES ARE THEIR CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES, AND…

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