Ratings put U.Va. in financial
By Charlotte Crystal
& Poors has just upgraded the University to a triple-A
debt rating, making U.Va. one of only two public universities
in the country along with the University of Texas
to hold the coveted ranking from all three of the financial worlds
major bond-rating agencies.
always a big accomplishment to be upgraded, but its especially
significant in this economic environment, said Yoke San
L. Reynolds, U.Va. vice president for finance.
& Poors raised its rating from AA+ to AAA on the Universitys
outstanding debt, joining Fitch Ratings and Moodys Investors
Service in assessing the quality and relative safety
of an investment in U.Va. bonds as the best there is.
two private universities have been rated triple-A by all three
services, Dartmouth College and Stanford University, although
many private institutions have sought ratings only from Moodys
and S&P, Reynolds said.
decisions of the rating agencies reflect an assessment of the
entire institution, said Leonard W. Sandridge, executive
vice president and chief operating officer. The performance
of our staff, the leadership of the president and the board, the
quality of our academic and health care programs, our endowment,
the successful capital campaign and the effectiveness of our financial
and business operations all contribute to the strength of the
solicited the debt ratings, all released in late February, as
it prepared to issue $200 million in bonds to cover some of the
costs of seven capital projects and refinance existing, more expensive
debt. On March 5, Lehman Brothers led a consortium of investment
banks in selling $118 million of Series 2003B bonds at maturities
ranging from one to 30 years, and at annual interest rates from
1.05 to 4.71 percent.
$118 million of the U.Va. bonds sold in one day, Reynolds said,
thanks to the Universitys reputation, good pricing and a
good marketing strategy on the part of the investment bankers.
The last time U.Va. went into the bond market was in 1999, making
U.Va. bonds a rare commodity.
dont borrow that often and when we do, were a quality
brand on the market, Reynolds said.
AAA rating covers not only U.Va.s existing debt, but also
the recent $118 million issue. The bonds will be repaid through
student tuition and fees, auxiliary revenues such as parking and
bookstore sales, and unrestricted gifts.
seven capital projects include an addition to the aquatic and
fitness center, renovation of the cancer center, expansion of
the U.Va. hospital, construction of a parking garage on Emmet
Street, a research building for the School of Medicine, a basketball
arena and a dining hall on Observatory Hill.
the bond proceeds, $85 million will be used to repurchase existing
debt for reissue at a lower interest rate, saving the University
about $700,00 a year in interest payments, or an expected total
of $7 million at present values, Reynolds said.
has always had fairly strong leadership, said John Fargnoli,
a director with Standard & Poors public finance division.
The upgrade was due largely to the schools strong
reputation and the improvement in its finances and increase in