U-M bonds keep their top ratings
The university has maintained its top bond ratings from two national rating services that investors look to before purchasing bonds.
With an "AAA" rating from Standard & Poor's and an "Aaa" rating from Moody's Investors Service, U-M is one of just three public universities in the nation to retain the top ratings as the nation's stalled economy begins to stabilize. The others are the University of Virginia and the University of Texas.
The ratings are important indicators that bonds issued by U-M are low risk and investors can have a high degree of confidence the university has an appropriate revenue stream to pay off the bonds, says Timothy Slottow, U-M executive vice president and chief financial officer.
A Moody's analyst said the stable outlook for the U-M "reflects the university's overall market, operational and balance sheet positions, which should sustain the university's credit strength despite a challenging economic environment."
In March Moody's revised the outlook for state of Michigan bonds from stable to negative, "reflecting the state's diminished economic resiliency."
Slottow says maintaining the top bond ratings in a state so hard-hit by the faltering auto industry is quite an accomplishment.
"It's important because it allows us to stick to our plans for important capital investments in our facilities with the lowest possible finance costs, which helps keep the state's economy moving forward as well," Slottow says.
The bonds being issued over the coming month will provide funds for several ongoing construction projects. Among those are the C.S. Mott Children's and Women's Hospitals replacement project, the new North Quad residential and academic complex and an addition to the Thompson Street parking structure on Central Campus.