S&P: College of New Jersey's 2016F-G Bonds Rated 'A'
S&P Global Ratings also affirmed its 'A' long-term and underlying ratings (SPURs) on the NJEFA's series 2008D, 2010B, 2012A, 2013A, and 2015G revenue bonds, also issued for the college. The outlook is stable on all bonds.
"We have assessed the college's enterprise profile as very strong, reflecting its stable enrollment, excellent selectivity, robust retention and graduation rates, and a stable and seasoned senior management team," said S&P Global Ratings analyst Shivani Singh. "We have assessed the college's financial profile as strong, with healthy operating surpluses due to growing student-generated revenues, and conservative budgeting and financial planning with dedicated revenue streams earmarked for debt service payments and repayments not tied to the college's educational and general operating budget."
We currently rate the state of New Jersey 'A' with a negative outlook. Our rating on TCNJ is the same as that of the state. Since TCNJ receives less than 30% of its adjusted operating revenues from state operating appropriations (including employees' fringe benefits paid by the state), we believe the rating on TCNJ reflects a relatively limited dependency on ongoing funding for its operations from the state. However, if the rating on the state were to fall below its present level and TCNJ's state operating appropriation dependence increases to 30% or greater, this could have negative credit implications for our rating on the college.
The stable outlook reflects our expectation that over the outlook period, TCNJ's enrollment will remain stable, financial operations will be positive on a full-accrual basis, and available resource ratios will be stable at current levels.
In our view, the rating could come under pressure if there are consecutive years of enrollment declines, full-accrual operating losses, and deterioration in available resource ratios. Although unlikely to occur, a negative rating action on the state and TCNJ's increased state operating appropriation reliance to 30% or greater could have an impact on the rating on TCNJ.
We do not expect to raise the rating during the two-year outlook period due to TCNJ's weak available resources to debt and potential for additional capital expenditures that could entail debt issuances. We would view growth in available resource ratios, endowment and positive fundraising trends favorably.