Standard & Poor's Rating Services said it revised its outlook to positive from stable on Michigan State University (MSU)'s existing general revenue debt, issued by the Michigan State University Board of Trustees.
Standard & Poor's also affirmed its AA long-term rating and underlying rating (SPUR), as well as various AA/A-1-plus ratings on MSU's general revenue debt outstanding. The A-1-plus short-term ratings on variable-rate demand bonds (VRDBs) outstanding are based on various bank liquidity facilities.
"The positive outlook is supported by MSU's strong balance sheet ratios relative to the rating category, its demand position as a co-flagship university, stable enrollment, manageable debt burden, solid operating performance and a tradition of strong fund raising," said Standard & Poor's credit analyst Jessica Lukas. "We expect the university will be able to manage effectively through a continued period of state funding uncertainty," Lukas added.
Management reports it has made more than $110 million in cost-containment efforts during the past three years to reduce expenses, including re-engineering its employee health care programs and focusing spending on core activities.