Rockefeller University, NY Series 2020A And 2020B Revenue Bonds Assigned 'AA' Rating

NEW YORK (S&P Global Ratings) March 16, 2020--S&P Global Ratings assigned its 'AA' rating to the Dormitory Authority of the State of New York's $39.6 million series 2020A tax-exempt revenue bonds and $75.4 million 2020B taxable revenue bonds, issued for Rockefeller University. At the same time, S&P Global Ratings affirmed its 'AA' rating on the Dormitory Authority of the State of New York's series 2012A, 2012B, 2019A, 2019B, and 2019C bonds, issued for Rockefeller University. The outlook is negative.
In addition, we affirmed our 'AA/A-1' dual ratings on the series 2002A-2 and 2008A bonds. The 'AA' long-term rating reflects our long-term rating on Rockefeller. The 'A-1' short-term rating on the series 2002A-2 and 2008A bonds reflects our view of the standby bond purchase agreement (SBPA) from JPMorganChase Bank N.A., expiring in 2023. The outlook, where applicable, is negative.
"The 'AA' rating reflects our opinion of Rockefeller's strong reputation as a premier research organization and its impressive fundraising history," said S&P Global Ratings credit analyst Charlene Butterfield. We expect that over time, Rockefeller will grow its available resources such that ratios compared with debt become consistent with the rating category, and provide greater offset to the variable operating results.
The negative outlook reflects our expectation that during the next two years, Rockefeller will record variable operating results, that available resources ratios compared with debt will remain compressed for the rating category, and that the organization could draw further on its line of credit to fund future legal expenses, in excess of any potential insurance recoveries, related to the investigation of a former physician engaged in allegedly inappropriate conduct.
During the next two years, we could consider a lower rating if Rockefeller's resources ratios fail to improve solidly from current pro forma levels, or if the debt load increases without substantial and commensurate growth in resources, or if a trend of full accrual operating deficits emerges.
Given uncertainty regarding future expenses to resolve the aforementioned legal matter, pro forma resources ratios that are low for the rating category when measured against debt, and expectation of variable operating performance, we do not expect to consider a positive outlook or higher rating during the next one to two years. We would base a return to a stable outlook on Rockefeller University maintaining positive full accrual results and growing available resources compared with debt by substantial amounts during the next two years.
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