CHICAGO — Standard & Poor's upgraded the Iowa Board of Regents' parking system revenue bonds one level to AA-minus based on strong parking demand.
The rating agency previously assigned an A-plus rating to the bonds, issued on behalf of the State University of Iowa. The outlook is stable.
The rating review came ahead of a new money issue for $20 million of parking system revenue bonds.
"We raised the rating on the parking system revenue bonds to reflect our view of strong demand for university parking, consistently solid debt service coverage, and overall strong institutional characteristics of SUI," said Standard & Poor's analyst Shivani Singh.
The credit also benefits from the school's position as one of Iowa's co-flagship universities, the university's overall strong financial performance, and generally stable enrollment trends. Pressures on the credit include projected declines in state high school demographics and substantial debt plans for the next two years.
Moody's Investors Service affirmed the bonds' Aa1 rating and stable outlook ahead of the sale.
"The State University of Iowa's Aa1 rating reflects its national reputation as the state's flagship university and Big Ten member, strong research position and role as major health care provider for the state," analysts wrote.
Moody's also cited ongoing capital plans as a credit challenge as well as exposure to healthcare operations through its University of Iowa Hospitals and Clinics system. The school had a record fall enrollment of more than 29,000 students.