OREANDA-NEWS. S&P Global Ratings raised its long-term and underlying ratings (SPUR) and issuer credit rating (ICR) to 'AA+' from 'AA' on Tennessee State School Bond Authority's (TSSBA) second program debt. The outlook is stable.

The 'AA+' ratings on the authority's second program debt reflects the application of our government-related entity (GRE) criteria, which provides a one-notch uplift to TSSBA's stand-alone credit profile (SACP) of 'aa' based on its role and link with the state of Tennessee, and likelihood of extraordinary government support (see "General Criteria: Rating Government-Related Entities: Methodology And Assumptions", published March 25, 2015). The rating action follows our upgrade of Tennessee to 'AAA' from 'AA+' on May 26, 2016.

The SACP reflects the underlying credit quality of TSSBA without the benefit of extraordinary state support. It also reflects our view of the underlying credit strength of the state's two systems of public higher education.

TSSBA is a component unit of Tennessee. It issues debt for revenue-supported projects for the University of Tennessee (UT) Board of Trustees, which oversees the UT system (composed of four universities and three institutes), and the Tennessee Board of Regents (TBR), which currently is the governing body for six state universities, 13 community colleges, and 27 technology centers.

"The stable outlook reflects our expectation that the debt financing program administered by TSSBA will continue to collect sufficient revenues from each respective institution to generate solid debt service," said S&P Global Ratings credit analyst Shivani Singh.