Moody's Investors Service said it has upgraded the long-term debt rating on the University of San Francisco's $77.3 million of Series 2011 bonds issued through the California Educational Facilities Authority (CEFA) to A2 from A3.
The outlook has been revised to stable from positive at the higher rating level.
The CEFA-issued Series 2000, 2003 and 2005B variable rate bonds carry Aa3/VMIG 1 ratings based on direct pay letters of credit from JPMorgan Chase (rated Aa3/P-1).
The upgrade to A2 reflects USF's solid and sustained market position in a competitive environment supported by healthy net tuition revenue growth and consistent ample positive operating performance, sufficient balance sheet cushion to debt and operations, and adequate liquidity profile, in addition to a debt profile that has nearly halved its variable rate exposure in the last two years and no new near term borrowing plans.
Offsetting challenges are a highly competitive student market and a remaining debt structure of 41% variable rate debt supported by bank letters of credit (LOCs) requiring financial covenant compliance.
