Moody’s Confirms California State University Long-Term Debt Rating, Removes From Watchlist
Moody’s Confirms CSU's Long-Term Debt Rating, Removes From Watchlist
(Oct. 28, 2009) – Moody’s Investors Service has confirmed the long-term debt rating of the California State University, specifically the Aa3 rating on its Systemwide Revenue Bonds and A1 rating on the State Public Works Board Bonds.
The bond rating firm also removed CSU from the Watchlist and said the rating outlook is stable.
Moody’s cited the system’s implementation and management of its revenue enhancement and expense reduction plan to address massive state budget cuts as the foundation for its decision. Moody’s rating of the CSU’s lease revenue bonds issued by the state Public Works Board is based on the strength of the CSU’s pledge to make rental payments, and the state’s consistent practice of including funds for payment in its annual budget.
Overall, Moody’s indicated that the stable outlook for the CSU is based on its expectation that student demand to attend the CSU will continue, and confidence in its ability to continue its favorable debt service coverage. In particular, Moody’s cited CSU’s centralized debt management function, capital needs assessment and investment strategy as strengths. In its assessment, Moody’s did acknowledge the ongoing challenges of CSU’s continued reliance on declining state revenues to fund system operations and capital funding for academic facilities.
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About the California State University
The California State University is the largest system of senior higher education in the country, with 23 campuses, approximately 450,000 students and 48,000 faculty and staff. Since the system was created in 1961, it has awarded nearly 2.5 million degrees, about 90,000 annually. Its mission is to provide high-quality, affordable education to meet the ever-changing needs of the people of California. With its commitment to excellence, diversity and innovation, the CSU is the university system that is working for California.