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S&P Boosts UNCW Bond Credit Rating

By Jenny Callison, posted Apr 1, 2016
Friday, one day after it celebrated the installation of its new chancellor, University of North Carolina Wilmington had another reason to celebrate.
The university received word from Standard & Poor’s Rating Services that the company had upgraded UNCW’s credit rating on limited obligation bonds from “A-“ to “A” with a stable outlook. The boost was based on UNCW’s financial performance and projected revenues from auxiliary services such as housing, dining and parking, according to the university’s news release. 
In 2015, Standard & Poor’s took 51 rating actions in the higher education sector, with only ten of these being upgrades, the release stated.
“This upgrade from Standard & Poor’s, one of the major bond rating agencies in the U.S., reflects the positive momentum we continue to build,” UNCW chancellor Jose Sartarelli said in the release. “We are very pleased that S&P has recognized UNCW’s performance with a rare upgrade.”
S&P based its decision on a review of 2008 series certificate of participation (COP) bonds that support dormitory and parking improvements. The 2008 bonds were issued by the UNCW Corporation, a nonprofit, tax-exempt entity that was created to facilitate financing of housing and parking capital projects, according to the release. The corporation finances the projects through the bonds and leases the facilities to UNCW, which manages them.
The S&P analysis, quoted in the release, noted that the “A” rating reflects strong revenues from auxiliary operations, high residence hall occupancy rates and the university’s managerial and financial commitment to student housing projects. Other factors include favorable enrollment trends, the quality of UNCW students and a history of state support.
While the agency does not maintain a public issuer credit rating on UNCW itself, S&P expects “that the university's financial performance will remain stable, demand for the university's programs will remain robust, and the university's available resources will moderately improve.”
Rick Whitfield, UNCW’s vice chancellor for business affairs, said in the release the upgrade endorses the university’s “conservative financial philosophy” and affirms the university’s focused financial discipline.
“This rating is recognition of the strength of the university’s housing, dining and parking operations,” he continued. “We take our obligation to our students, the public and our investors very seriously and are gratified to see it recognized in this way. I am really proud of my team, who worked tirelessly to attain this upgrade, and of the campus as a whole for its commitment to smart and efficient business practices."
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