S&P: University of Rhode Island's 2016A-B Bonds Rated 'A+'
In addition, S&P Global affirmed its 'A+' long-term and underlying ratings (SPURs) on Rhode Island Health & Educational Building Corp.'s revenue bonds issued for the University of Rhode Island (URI). The outlook is stable.
"We assessed URI's enterprise profile as very strong, characterized by increasing enrollment, healthy retention, and improving selectivity for the rating category," said S&P Global Ratings analyst Charlene Butterfield. "We assessed URI's financial profile as strong, with solid full accrual operating performance and moderate debt burden offset by what we consider low financial resources for the rating category." Combined, we believe these credit factors lead to an indicative standalone credit profile of 'a+' and a final rating of 'A+'.
Management indicates that the university has capital needs during the next few years that could result in a moderate issuance of debt. The state and board has not yet authorized the debt issuance, and as such we have not fully factored the additional debt into the rating at this time. We will assess the effect of additional debt at the time of issuance and in light of further income statement and balance sheet growth.
The stable outlook reflects our expectation that URI's enrollment, demand, and financial profile will remain stable in the next two years. In addition, we expect potential debt issuance to be commensurate with growth in available resources.
We could consider a negative rating action during the next one to two years if URI's available resources deteriorate substantially from current levels, or if additional debt is issued beyond the amount expected. In addition, we could consider a negative rating action if a trend of enrollment declines or full accrual operating deficits emerge during the next one to two years.
We do not expect to consider a positive rating action during the next one to two years given the low level of available resources and plans for additional debt and capital spending that would likely dampen the financial profile.
Originally chartered in 1888, URI is the only publicly supported research institution in Rhode Island, and it serves as the state's land, sea, and urban grant university.