University Of Connecticut Bond Rating Lowered To 'A+' On Constrained Finances, Operational Performance; Outlook Stable

NEW YORK (S&P Global Ratings) April 5, 2019--S&P Global Ratings lowered its 
long-term ratings on all outstanding University of Connecticut (UConn) general 
obligation (GO) bonds and special obligation-student fee revenue (SO-SFR) 
bonds to 'A+' from 'AA-'. At the same time, S&P Global Ratings assigned its 
'A+' long-term rating to UConn's estimated $174.5 million series 2019A GO 
bonds and $64.9 million series 2019A refunding GO bonds. Total debt affected 
by this rating action, inclusive of a minor loan and capitalized leases and 
the current debt issuance, is $2.15 billion. The outlook is stable for all 
issues.

"The rating revision reflects our view that UConn's financial performance and 
available resources are constrained due to ongoing state budgetary pressure 
that limits improvement in financial operations and inhibits additional 
issuance of non-state supported debt," said S&P Global Ratings credit analyst 
Ken Rodgers. The long-term ratings reflect our view that UConn's enterprise 
profile is very strong and its financial profile is strong, leading to an 
initial indicative stand-alone credit profile rating of 'a+' and final bond 
issue rating of 'A+'. 

The stable outlook reflects our view that over the next two years UConn's 
enrollment is likely to remain relatively stable despite an increasingly 
competitive northeast higher education market while ongoing state budgetary 
pressure depresses financial performance and available resources growth. In 
addition, the outlook reflects our expectations that a presidential leadership 
transition expected in August 2019 will occur smoothly and that senior 
management and faculty leaders will continue to follow responsible and timely 
budget practices to assure no further diminution in financial performance and 
maintain adequate available resources while limiting additional debt issuance. 

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