Standard & Poor's says it plans to upgrade the debt of Polytechnic Institute of New York University by six notches on January 1.
S&P's upgrade would affect $97.6 million in debt.
The Polytechnic Institute was founded in 1854 and is the second oldest private engineering school in the country. In 2008 Polytechnic entered into an agreement to take steps to merge with New York University. Since then, the two schools have signed an agreement for Polytechnic to become NYU's School of Engineering on Jan. 1, 2014.
When that occurs, NYU will assume all of Polytechnic's debt as well as gain all its assets. S&P rates NYU's debt at AA-minus.
On Tuesday S&P put Polytechnic's debt on positive credit watch. Once the merger takes place on Jan. 1, S&P plans to rate all the debt AA-minus with a stable outlook, it stated.
Polytechnic enrolled 4,652 students in fall 2012, about 45% of whom were undergraduates.
Since 2008 Polytechnic's students have greatly improved, S&P stated. In this period its operating performance has also improved. It nearly broke even in fiscal 2012. It projected break-even results in fiscal 2013.
