The University of Idaho is back to a stable outlook from Moody's Ratings after pulling the plug on plans to buy a for-profit online university.
Moody's Monday confirmed the university's A1 issuer and revenue bond ratings, assigning a stable outlook and concluding the
The two institutions
The Idaho university had hoped to expand its reach to adult learners and online students and to benefit from the University of Phoenix's expertise in delivering workforce training, but the deal had "become cost prohibitive, and potentially distracting to our other work," UI President Scott Green said last week.
The deal faced skepticism from state lawmakers and
The university had about $141 million of debt outstanding at the end of fiscal 2024, Moody's said.
The rating agency said the A1 issuer rating is supported by the university's sizable wealth and "very good brand and strategic positioning" as the state's land-grant university and research university with comprehensive program offerings.
The rating is pressured by thinning operating performance in fiscal 2024, with annual debt service coverage below 1x, the rating agency said.
But growing enrollment and net tuition revenue and steady state appropriations will result in improved margins in fiscal 2025 and beyond, Moody's said.
As part of the termination agreement, the University of Idaho will receive a $17.2 million breakup fee from the University of Phoenix to cover due diligence costs associated with the proposed transaction.
The university enrolls more than 11,800 students.
