Boston University's outlook got a Moody's Investors Service boost to positive from stable as the rating agency affirmed its A1 rating.
"The university's finances show continued signs of improvement and it could be upgraded in the next 12 to 24 months," Moody's said in a statement.
The university, which lists a student body of 33,119 on its website, intends to issue $219 million of Series BB-1, BB-2 and BB-3 through the Massachusetts Development Finance Agency. The A1 rating applies to Boston University's $1.2 billion of rated debt outstanding.
According to Moody's, the improved outlook reflects BU's improved ability to invest in strategic initiatives, strengthen cash flow, sell real estate holdings throughout metropolitan Boston, and raise funds combined with a moderate reduction of liquidity risks in its debt portfolio.
"We also maintain enhanced ratings based on the banks providing letter of credit support for $158 million of variable rate demand bonds," said Moody's.
Credit challenges, according to Moody's, include the competitive Boston market for students and research dollars, a complex debt structure requiring significant management oversight, and the posting of collateral to swap counterparties.
