LOS ANGELES — Washington State University is planning to sell $60 million of general revenue bonds later this month to fund updates to its housing and dining system and to build a clean technology laboratory building.
The bonds have received double-A-level ratings and stable outlooks from Moody's Investors Service and Standard & Poor's, which both cite the university's established market position and growing enrollment.
"The rating on the 2014 bonds reflects our view of the university's overall credit profile, including solid support from the state and the university's integral role as the state's land-grant institution, stable enrollment and good demand, positive operating performance on a full-accrual basis, and modest post-issuance debt burden," said Standard & Poor's credit analyst Carlotta Mills.
The university has also demonstrated significant growth in expendable financial resources, according to Moody's. Such resources grew twofold in fiscal year 2013 to $418 million from $203 million in fiscal year 2010. Analysts said the growth was driven by operating surpluses from tuition increases and enrollment growth.
Moody's said its Aa2 rating also incorporates lower coverage of debt from unrestricted financial resources relative to similarly related peers, and decreased flexibility to curtail expense growth.
Other challenges include a highly competitive student market, evident in the lower amount of accepted students in fall 2013, and operating results that are vulnerable to volatility in federal government funding.
Washington State University is a public research university based in Pullman, Wash. The university also operates campuses across the state including WSU Spokane, WSU Tri-Cities, and WSU Vancouver.
