California State University Raised to AA-Minus by S&P

Standard & Poor's Ratings Services raised its long-term and underlying rating to AA-minus from A-plus on the outstanding California State University's systemwide revenue bonds.

In addition, Standard & Poor's assigned its AA-minus long-term rating to the approximately $381 million series 2013 systemwide revenue bonds. The outlook is stable.

"The upgrade reflects the historical improvement in operating performance, primarily due to its strong management team with good fiscal planning and policies in place," said Standard & Poor's credit analyst Bianca Gaytan-Burrell. "Although fiscal 2012 was negative on a full-accrual basis, mostly due to a midyear state appropriation reduction, we believe the system was able to prudently manage through such constraints within the budget and maintain sufficient operating liquidity in the event of any cash flow volatility at the state level," added Gaytan-Burrell.

As the state funding environment has stabilized for the near future it should help the university stabilize enrollment and improve financial resources in the long run.

The series 2013 bond proceeds will be used to refund outstanding system revenue and auxiliary system bonds. A broad pool of revenues, such as student housing fees; student union fees; and parking, student center, and continuing education revenues secure the systemwide revenue bonds.

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