Standard & Poor’s last week revised its outlook on the University of Rochester to positive from stable as revenue growth and limited spending have improved the school’s operating performance.
The private, nonprofit institution had $772.9 million of outstanding debt, as of June 30. The rating is A-plus.
The university’s financial operations rebounded in fiscal 2010 after declines in operations in the two previous years. Revenue increased in fiscal 2010 while expenses grew at a slower rate.
Strong Memorial Hospital is the university’s primary teaching facility. The hospital’s fiscal operations are incorporated into the school’s finances.
It is the largest acute-care general hospital in Rochester and the region, with 739 beds.
“We believe the current and future spending rates are more sustainable over time, and provide greater flexibility at the current rating,” according to a Standard & Poor’s report on the credit.
University officials anticipates issuing $150 million of debt in late 2011 and returning to the capital markets again in the next three to five years for capital needs, Standard & Poor’s said.
The $150 million of additional debt “could pressure financial resources based on fiscal 2010 results,” according to the credit report.
In fiscal 2010, the bulk of the university’s revenue, 62%, came from hospital operations. Sponsored research and tuition and fees accounted for 15% and 12%, respectively.
Fall 2010 enrollment totaled 10,111 and officials expect to meet enrollment goals for the fall of this year.
Students paid a total of $51,922 in undergraduate charges for the 2010-11 school year.
Moody’s Investors Service rates the university’s credit Aa3 and Fitch Ratings rates it an equivalent AA-minus.
