S&P: Lehigh University, PA's 2016A Bonds Assigned 'AA-' Rating
Also, S&P Global Ratings affirmed its 'AA-' long-term rating (and underlying rating, or SPUR, for a portion of the 2007 insured bonds) on the authority's series 2007 and 2009A revenue bonds issued for Lehigh University.
S&P Global Ratings affirmed its 'AA-/A-1+' rating on the authority's series 2006A revenue bonds, issued for the university. The long-term rating component reflects the 'AA-' rating on the university's bonds, while the short-term rating reflects our view of Lehigh's self-liquidity provision.
S&P Global Ratings also affirmed its 'AA-/A-1' rating on the authority's series 2000B and 2001 revenue bonds, issued for the university. The bonds are supported by a standby bond purchase agreement (SBPA) from JPMorgan Chase Bank N. A. that expires in September 2018. The long-term rating component reflects the 'AA-' rating on the university's bonds, while the short-term rating component reflects the 'A-1' short-term rating on JPMorgan Chase Bank.
Finally, S&P Global Ratings affirmed its 'A-1+' short-term rating on the university's series A taxable commercial paper (CP) notes, reflecting our view of Lehigh's self-liquidity provision. Approximately $20 million has been drawn against the $75 million authorized amount. We have not incorporated any additional draw against the authorized amount into our debt-related ratios.
The outlook, where applicable, is stable.
The series 2016A bond proceeds, along with the premium, will go towards refunding the series 2007 MBIA insured fixed-rate series. The approximately $150 million of taxable proceeds will go toward various capital projects, including projects on the Mountaintop facility for integrated learning, and science and STEM labs. In addition, the savings from the refinancing of the series 2007 and 2009A bonds provide some annual debt service relief and significant present value savings.
"The long-term rating reflects our opinion of Lehigh's continued positive operating surpluses, solid demand and stable enrollment, healthy financial resources for the rating, and successful history of fundraising and solid alumni participation rates," said S&P Global Ratings credit analyst Suzie Desai.
The stable outlook reflects our opinion that during the next two years, Lehigh will likely continue to generate operating surpluses on a full-accrual basis, maintain stable enrollment, strengthen or maintain demand metrics, and demonstrate financial resource ratios consistent with the rating category.