Moody's Investors Service affirms EMU's A2 long-term debt rating
YPSILANTI - Citing “prudent fiscal management,“ Moody’s Investors Service has affirmed Eastern Michigan University’s underlying A2 long-term debt rating and labeled it “stable.”
In issuing the summary, Moody’s said that EMU’s “stable operating performance despite successive years of state funding reductions reflects prudent fiscal management.”
The report also noted that the University’s growing financial resource levels reflect solid investment returns. The University also provides good coverage of debt and operations.
“This is a strong endorsement of the University’s fiscal and financial stewardship,” said Steve Holda, interim director of finance for EMU. “This is an unbiased, third party evaluation of how we operate the University.”
The rating action affects $138 million of outstanding Series 1997, 2000, 2000B, 2001, 2002A, 2002B and 2003A bonds, which are also rated Aaa based on municipal bond insurance.
Bond ratings influence the cost to the University to borrow money. The higher the rating, the less interest is paid on a loan. The highest attainable rating is AAA.
The report cited EMU’s challenges as: difficult economic environment prompting some applicants to choose lower-cost community colleges; a decline in enrollment for fall 2004; ability to continue to generate positive operations in the face of an unexpected mid-year state funding cut for the current year, and modest support from fundraising.
Holda said maintaining a stable bond rating with those challenges is quite an accomplishment.
“It has been very difficult and there has been a cost, but we are holding our own,” Holda said.
Eastern Michigan University is a public, comprehensive university that offers programs in the arts, sciences and professions. EMU prepares students with the intellectual skills and practical experiences to succeed in their careers and lives, and to be better citizens.
Eastern Michigan University is a public, comprehensive university that offers programs in the arts, sciences and professions. EMU prepares students with the intellectual skills and practical experiences to succeed in their career and lives, and to be better citizens.
Editor's Note: Looking for an expert source for a story? Check out EMU's Eastern Experts online at www.emich.edu/univcomm/easternexperts.