DALLAS – S&P Global Ratings has assigned its A- long-term rating to the Connecticut Health & Educational Facilities Authority’s $180.285 million series P revenue refunding bonds, issued for Quinnipiac University. At the same time, the ratings agency affirmed its A- long-term rating on the authority’s debt that has been issued for Quinnipiac.
“We have evaluated the university’s environmental, social, and governance risk factors in our credit rating analysis,” S&P stated. “Similar to other schools in the Northeast, we believe Quinnipiac is affected by demographic pressure, which we view as a social risk, with fewer graduating high school students anticipated in the region for the next several years. In our view, this could make enrollment growth challenging. Despite the elevated social risk, we found the university’s environmental and governance risk factors to be neutral in our credit rating analysis.
“The stable outlook reflects our expectation that over the next two years Quinnipiac will maintain stable enrollment and report full accrual operating surpluses, while incrementally improving its financial resource ratios. We do not expect the university to issue additional debt during the outlook period.”
However, the ratings agency did warn that it could consider a negative rating action during the outlook period if enrollment weakens materially, operating margins become negative, or financial resource ratios soften meaningfully. “While not expected, we could also consider a negative rating action if Quinnipiac issues significant additional debt without commensurate growth in financial resources,” S&P stated.
On the other hand, S&P said it could consider a positive rating action during the outlook period if the university improves its financial resource metrics while maintaining its demand profile and healthy full-accrual operating surpluses.
