Moody’s Investors Service has assigned an A2 rating to Valparaiso University’s 2014 bond issuance with a stable outlook, which indicates low risk to investors.
The global credit rating, research and risk analysis firm has also affirmed Valpo’s A2 rating on outstanding debt, which, according to the report, reflects the University’s conservative financial management driving positive operations and generating sound debt service coverage.
“This rating is a positive indicator of Valparaiso University’s strength, particularly at a time when higher education faces significant challenges,” said John A. Palmucci Jr., senior vice president for finance and administration. “We’re pleased Moody’s believes investing in Valpo is a financially sound decision.”
Valpo’s A2 rating is at the median rating of more than 280 rated private colleges and universities. However, private university downgrades continue to outpace upgrades, with 17 private universities downgraded in 2013, as Valpo maintains A2 with stable outlook ratings.
The 2014 bond proceeds will finance capital projects, including a 288-bed residence hall.
In September, Valpo announced its total enrollment of 4,520 was at its highest level in 34 years. Moody’s report indicates that growing enrollment, along with net tuition revenue per student, supports the A2 rating. It also cites established student demand with a broad program array and growing enrollment as one of Valpo’s primary strengths.
The report also praises Valpo’s strong financial management, which contributes to consistently positive operating performance and strong debt service coverage.