S&P: Lubbock Christian University, TX 2016 Revenue Bonds Rated 'BBB'
"We assessed LCU's enterprise profile as adequate, characterized by planned enrollment declines and sufficient demand profile, with satisfactory selectivity and matriculation rates for the rating," said S&P Global Ratings credit analyst Ashley Ramchandani. "We assessed LCU's financial profile as adequate, with improving, though negative, operating performance despite high student dependence and low tuition discount and maximum annual debt service burden. Combined, we believe these credit factors lead to an indicative stand-alone credit profile of 'bbb'." In our opinion, the 'BBB' rating on the college's bonds reflects LCU's sound available resources.
A lower rating is precluded at this time by LCU's available resources, highlighted by healthy cash and investments, which we expect to grow over time given the school's upcoming fundraising efforts.
The approximately $19.7 million in net proceeds from the series 2016 will be used to refund the 2007 bonds--the university's only debt--and provide about $2.7 million to refurbish two dormitories on campus and support deferred maintenance costs. The bonds are a general obligation of the university.