St. Benedict College Rises

Moody’s Investors Service has upgraded the College of Saint Benedict’s credit to Baa1 from Baa2 ahead of its $19.5 million bond sale.

The upgrade impacts a total of $34.5 million, including the new issue.

The bonds are being sold through the Minnesota Higher Education Facilities Authority later this month. Proceeds of the sale will refund some outstanding debt and finance the acquisition of apartments near the campus.

“The upgrade to Baa1 from Baa2 is driven by the college’s well-defined niche as a women’s institution, favorable operating performance, and resource growth,” Moody’s analysts wrote. The school’s enrollment is 2,067.

Saint Benedict has experienced favorable operating performance with an operating margin that has averaged 7.6% over the last three years, providing three times debt service coverage in fiscal 2007.

The college’s challenges include competition from other private and public higher education institutions in Michigan. Its tuition and fees are about $34,000 annually, slightly above the state’s average of $33,000, and tuition pricing could face pressure given competition and declining state high school graduation rates.

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