OREANDA-NEWS. S&P Global Ratings has assigned its 'AAA' long-term rating to the Connecticut Health and Educational Facilities Authority’s (CHEFA) $100 million series 2013A bonds issued on behalf of Yale University. At the same time, S&P Global Ratings affirmed its 'AAA' long-term rating and 'A-1+' short-term rating on various debt issued by and for Yale. The outlook is stable.

We base the rating on the remarketing of the bonds for another three-year term on July 21.

"The 'AAA' rating reflects our view of Yale's extremely strong enterprise profile and very strong financial profile," said S&P Global Ratings credit analyst Laura Kuffler-Macdonald. We base the extremely strong enterprise profile on the university's market position and demand profile, as well as its and impressive fund raising track record. The financial profile incorporates an improving operating performance and exceptional financial resources. Combined, these credit factors lead to an indicative stand-alone credit profile of 'aa+'. As our criteria indicate, the final rating can be within one notch of the indicative credit level. In our opinion, the 'AAA' rating on the college's bonds better reflects Yale's significant cash and investments compared with debt outstanding.

The stable outlook reflects our expectation that, in the next two years, Yale will sustain its 2014 and 2015 return to positive operating performance on a generally accepted accounting principles basis while increasing margins, maintain its impressive endowment level, and continue to increase financial resource levels, particularly with respect to debt. In addition, we expect the university's impressive demand and stable enrollment trends will continue and that Yale will limit the issuance of significant debt during the next two years without a commensurate increase in resources.

Although unlikely, we could consider lowering the rating in the next two years if the university produces sustained operating deficits or if expendable resources weaken relative to operating expenses or debt. Deterioration of financial resources, particularly with respect to debt, unsustainable endowment draws, or significant debt issuance without a commensurate increase in financial resources could also have negative rating implications.