Standard & Poor (S&P) Global Ratings has upgraded its outlook for Seton Hall University’s revenue bonds issued by the New Jersey Education Facilities Authority to Stable. S&P rates the University’s bonds “BBB+” which is solidly investment grade.
Upon reviewing the University's performance and plans, S&P Global reported: “The outlook revision reflects our opinion of SHU's financial profile given improved operations and growing available resources which have enhanced credit flexibility. The outlook revision also reflects our view of growing enrollment, coupled with consistency in its demand metrics. SHU does not have any additional near-term debt plans, further lending credit stability.”
Prior to the pandemic, Seton Hall successfully issued bonds through the New Jersey Educational Facilities Authority at historically low rates to ensure access to funding for strategic capital projects. Many organizations faced challenges as the pandemic came ashore, while Seton Hall emerged as an early leader in responding to and advancing through the health crises and the S&P Global assessment reflected upon the stability of Seton Hall leadership’s team, acknowledging the University’s full-accrual operating surplus in Fiscal 2021 and the expectation for continued positive operations moving forward. The organization also reflected on the institution’s recent growth in full-time equivalent enrollment, maintaining sufficient available resources and a manageable pro-forma maximum annual debt service of 4.3 percent.
Upon reviewing the University's performance and plans, S&P Global also noted:
- We consider SHU's budgeting conservative, including routine budgeting for depreciation expenses, which we view as a best practice.
- SHU's strategic plan remains focused on improving academic quality, increasing student engagement, and operating with excellence.
- SHU recognizes the need to continue to grow resources while maintaining operating surpluses. In our view, it has good financial practices and manages proactively.
- SHU has formal endowment and investment policies. It operates according to a five-year strategic plan and maintains a formal reserve and liquidity policy. SHU meets standard annual disclosure requirements.
Donna McMonagle, Vice President for Finance and Chief Financial Officer said, “This rating and our stable outlook, despite the headwinds facing higher education more broadly, continue to reflect Seton Hall’s secure financial position and our commitment to managing mid and long-term strategic planning, goals and priorities to ensure our students will achieve academic excellence and exceptional opportunities to take them into the future.”
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