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Western Sees Bond Rating Increase

Western's welcome center building

Western Colorado University leaders are celebrating the favorable review of the institution’s financial strength through a multi-level bond rating increase by Moody’s Investment Services.

Moody’s is one of several well-known bond rating agencies that evaluate fixed income securities and provide a rating based on the health of a bond issuer’s financial status.

Western was moved from a “Baa1” to an “A3” rating.

Strong Operating Performance

“The upgrade of (Western Colorado University’s) issuer rating to A3 reflects strong operating performance which will continue after (the) spend down of federal pandemic relief,” a press release issued by Moody’s stated. “Favorable performance is driven by steady enrollment and net tuition revenue growth, along with good expense management.”

Enrollment, the release continued, dipped in fall 2020 because of the pandemic after multiple years of steady growth, but favorably bounced back in fall 2021. Additionally, the upgrade reflects prospects for improved funding from the State of Colorado, providing an additional boost to operating performance, as well as potential for stronger fundraising contributing to Western’s bottom line.

A Regional Public University

The A3 is also supported by Western’s role as a regional public university with some distinctive programs that support demand, the release stated.

“This upgrade was particularly gratifying in that we jumped to A3 without the standard stair-step to a positive ratings outlook,” said Brad Baca, the university’s president (effective July 1, 2022).

Benefits of the Rating

The new rating would allow Western to borrow money at a lower interest rate and have access to the state’s credit rating as well.

Baca said that the university does not currently have any plans requiring debt financing but is considering a private/public partnership for housing.

A Big Win for Western

“We will have to determine how this new rating upgrade might be impacted by such plans and what other options may now exist to get this important project off the ground,” said Baca. “This is a big deal for Western.”

Learn more about Western’s mission and campus profile.

 

 

Author Credit: Chris Rourke

Photo Credit: David Dieckhaus

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