Release Date: February 20, 2014
Debt rating agencies Fitch and Moody’s have assigned A1 and AA- ratings to Montclair State University’s approximately $182, 805,000 Series 2014A Revenue Bonds issued through the New Jersey Educational Facilities Authority (NJEFA).
The bonds are expected to go on sale at the end of February, with proceeds from the sale contributing to the construction of two new buildings – the Center for Environmental and Life Sciences and a new home for the School of Business – as well as technological infrastructure improvements. Revenue generated from the sale of the bonds also will fund capitalized interest and refund outstanding bonds.
In April 2013, the University was awarded nearly $94 million in state bond funding from the $750-million “Building Our Future” Bond Act that was approved by New Jersey voters in November 2012. Montclair State received more money than any other senior public or private institution with only public research universities receiving larger amounts. In September 2013, the University broke ground for the new $55-million, 107,500-square-foot Center for Environmental and Life Sciences and the $66-million,143,000-square-foot School of Business building. Both buildings are scheduled for completion by spring 2015.
“These mission-critical projects herald a new era for Montclair State and for higher education in New Jersey,” said Montclair State President Susan A. Cole. “The favorable bond ratings from Fitch and Moody’s affirm the validity of the University’s significant investment in the future of our students, our University and the State of New Jersey.”
In assigning an A1 rating and stable outlook to the Montclair State bonds, Moody’s took note of the University’s robust enrollment, sound financial operations and strong management. “The University has an effective leadership team that has a successful track record of implementing complex integrated financial and capital plans, in addition to recording substantial operating growth,” stated Moody’s in a news release.
“The rating could move up with successful completion of all planned new projects, continued steady enrollment growth, maintenance of robust operating performance and cash flows that provide solid debt service coverage and growth in financial resources,” Moody’s added.
Fitch also based its AA- rating and stable outlook on the University’s steady operating performance, record-breaking enrollment figures, competitive tuition and experienced management that have “demonstrated effective financial and budgetary controls, guided by a strategic plan with defined institutional goals.” According to Fitch, Montclair State’s capital investment will bolster both its credit profile and its competitive position as a leading public research university.