�һ�ֱ��

Moody’s Upgrades University of �һ�ֱ��’s Credit Ratings

November 17, 2023

Citing fiscal certainty and growing revenue, Moody’s Investor Service (Moody’s) today , and moved the rating outlook up to “stable.” The changes reflect Moody’s growing confidence in UA’s financial stability, capacity, and overall creditworthiness.

“These positive rating actions are just one more signal that increased state funding has helped UA achieve financial stability,” said UA Chief Financial Officer Luke Fulp. “When combined with our efforts to grow student enrollment and support a research enterprise that is aligned with state priorities and economic interests, UA is well-positioned to continue empowering �һ�ֱ��.”

The announcement comes as UA’s fall enrollment remains on track to grow by 4% over last year, with total headcount projected to reach 21,000 students. Last week, UA’s Board of Regents approved FY25 operating and capital budget requests prioritizing deferred maintenance, continued operating efficiency, and strategic programs that grow enrollment and empower �һ�ֱ�� - all ongoing efforts contributing to Moody’s growing confidence.

Moody’s specific actions were:

• upgrading UA’s issuer rating one notch to A3 from Baa1, based on the materially improved state funding environment; improved operating efficiencies; growing enrollment and tuition; expanding research activity; and UA’s vital role as the sole provider of public, post-secondary education in �һ�ֱ��;

• upgrading UA’s general revenue bond rating one notch to A3 from Baa1, based on the improved issuer rating and the University’s continued ability to pay for debt service;

• upgrading UA’s lease revenue bond rating one notch to Baa1 from Baa2, based on the improved issuer and general revenue bond ratings, and UA’s minimal leasing obligations; and
• moving UA’s rating outlook to “stable,” based on expectations that state financial support for operations and capital expenditures will remain strong. 

Moody’s identified factors that could lead to future ratings upgrades, including:

• Continued improvement in operating performance with stronger revenues, and 
• Increased liquidity to cover operating expenses.

Analysts also noted that future reductions in state funding, downturns in the state’s credit rating, or increased operating deficits could result in future rating downgrades.

Moody’s is a leading credit ratings, research, and risk analysis provider. The firm provides independent, third-party analysis to sovereign nations, public and corporate debt issuers, and universities around the country. Investors use credit ratings to measure creditworthiness and risk, and generally measure financial strength and capacity.