The New Jersey Institute of Technology's outlook was revised upward to stable from negative by Moody's Investors Service ahead of a planned $80 million bond sale.
Moody’s also assigned an A1 rating for $80 million of fixed-rate federally taxable general obligation bonds scheduled to sell on May 18 that are aimed at campus expansion plans and refinancing prior debt issued for NJIT through the New Jersey Educational Facilities Authority.
Moody’s analyst Pranav Sharma noted in a report released late Monday that NJIT has experienced steady student demand that is expected to drive solid operating performance and debt service coverage the next two years.
“NJIT's A1 rating reflects the public university's solid reputation in the engineering and technology fields, highlighted by a high proportion of international enrollment,” said Sharma in her report. “The stable outlook reflects our expectation of continued strong operating cash flow and manageable future capital plans, which will continue to improve the liquidity cushion relative to debt and operations.”
NJIT is rated A by S&P Global Ratings, one notch below the Moody's rating. S&P downgraded the state school one notch in 2015 citing concerns about its debt load for construction projects.
Sharma noted that NJIT has revenue diversity that supports the school’s operations and “insulates” it from potential volatility. The university near downtown Newark is likely facing a challenging state funding environment over the next few years given New Jersey’s fiscal challenges, according to Sharma.
NJIT is primarily a commuter school with about 10,000 full-time students. The university specializes in programs in information technology, engineering, physics and mathematics.