Lesley University, MA's Series 2019A And 2019B Bonds Assigned 'A-' Rating

SAN FRANCISCO (S&P Global Ratings) June 21, 2019--S&P Global Ratings assigned its 'A-' long-term rating to Massachusetts Development Finance Agency's series 2019A and 2019B bonds issued on behalf of Lesley University. At the same time, S&P Global Ratings affirmed its 'A-' long-term rating and underlying rating (SPUR) on the currently outstanding Massachusetts Development Finance Agency's tax-exempt and taxable revenue bonds, also issued for Lesley University. The outlook is stable.
We assessed Lesley University's enterprise profile as strong, with improving enrollment, a sound market position, and improving student quality. Lesley University's financial profile is also strong and reflects, solid financial resources, an improved pro forma maximum annual debt service burden, and average debt and contingent liability position. When combined, the profiles lead to an initial indicative stand-alone credit profile rating of 'a'. As our criteria indicate, the final rating can be within one notch of the indicative rating.
"In our opinion, the 'A-' rating better reflects the university's weaker selectivity, still high though improved maximum annual debt service burden, and weak matriculation rates relative to those of peers," said S&P Global Ratings credit analyst Phillip Pena.
The stable outlook reflects our expectation that enrollment will remain stable or modestly improve. We also anticipate relative stability in matriculation and selectivity rates. The stable outlook further reflects our belief that the university will continue to maintain solid available resources, and will not issue any additional debt without commensurate growth in financial resources. Additionally, we expect that the university will successfully navigate its increasing discount rate against its operating results.
The $57.3 million series 2019A and 2019B revenue bonds were issued to refinance the university's series 2011 bonds, series 2012 bonds (direct purchase with TD Bank), and about $31 million of bridge loans taken out to fund the purchase and renovation of the university's Brattle campus.
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