S&P: Arizona State University System Revenue Bonds Assigned 'AA' Rating
We also affirmed our 'AA/A-1+' rating on ASU's series 2008A and 2008B variable-rate demand system revenue refunding bonds, based on our long-term rating on ASU and the university's provided self-liquidity.
The ratings on the SPEED bonds differ from those on the system revenue bonds because the SPEED bonds have a subordinate pledge of university system revenue. The ratings on the COPs and appropriation debt differ from those on the system revenue bonds because the COPs' lease structure is subject to annual appropriation.
The 'A-1+' short-term rating reflects our view of ASU's ability to provide liquidity to support the purchase price of bonds that have been tendered and not remarketed.
"The 'AA' long-term rating reflects our opinion of the college's co-flagship status in the Arizona public higher education system, healthy admission profile, and consistently solid operating surpluses on a full-accrual basis," said S&P Global Ratings credit analyst Debra Boyd.
Proceeds from the $132 million in series 2016B (green bonds) will be used to finance the construction of the university's Biodesign C project and to finance its student pavilion project. The $97 million in series 2016C bond proceeds will be used to complete Phase III renovations to Sun Devil Stadium and renovations and improvements to research laboratories, classroom and academic facilities, buildings, and infrastructure.
The stable outlook reflects our expectation that over the two-year outlook period, ASU will maintain solid demand with large enrollments and a broad geographic draw.