S&P Global notes UMass strong financial profile in affirming AA- rating

BOSTON -- Citing the University's strong management team and operating performance, its conservative budgeting practices and other key factors, S&P Global has maintained UMass's AA- bond rating, reflecting its assessment of the University's soundness and stability.

The rating agency, formerly known as Standard & Poor's, assessed the University system's financial profile as "very strong," noting enrollment growth and freshmen demand as two metrics that outperform peer institutions. The report also highlighted the smooth transition of President Marty Meehan's administration, governance oversight, and comprehensive strategic initiatives, including an enhanced capital investment approval process, operational and educational efficiencies and cost control.

Strong bond ratings affirm financial practices and make borrowing less costly to the borrowing institution. UMass has saved $48 million by refinancing debt over the past two years - due to its strong bond rating and strategic decision making.

"I'm pleased by this strong vote of confidence in our vision and policies," President Meehan said. "We have put a lot of thought and care into every aspect of our growth, but specifically into the planning and modernizing of our campuses to accommodate the surge in demand for our world-class educational programs."

"Part of our strategic capital plan has been to invest in new research facilities on each of our five campuses. This has allowed us to modernize, compete effectively for R&D, and stay true to our mission as the state's public research institution," said UMass Building Authority Chairman Philip W. Johnston, who is also a UMass Trustee. "This report ratifies the hard work and planning that has gone on to date and supports the same fiscally prudent course going forward."

In addition to highlighting UMass's enrollment growth, the S&P Global report characterized improved student quality and rising student SAT scores as strengths of the University and factors in the strong AA- rating. The report also noted that UMass retention and graduation rates are above national averages.

Acknowledging the University's leading role in the Massachusetts public higher education system as well as the comprehensive nature of the five-campus system, S&P Global cited UMass's strong online educational presence and its "robust" research programs as significant "credit factors."

Factors cited by S&P Global in maintaining UMass's AA- bond rating:

  • University's financial profile is "very strong."
  • Strong enrollment growth and freshmen demand higher than peer institutions
  • Sound management and governance oversight
  • Smooth transition of new president
  • Strategic initiatives including operational and educational efficiencies, enhanced capital investment approval process and expense control
  • The University's flagship role in state's public higher education system and healthy state support
  • Robust research enterprise and strong online educational presence.
  • Moderate revenue diversity and sufficient liquidity
  • Historically conservative budgeting practices
  • Debt ratio, while elevated, remains below self-imposed 8 percent cap
  • Student retention and graduation rates above national average

With a research enterprise of $629 million in fiscal year 2015, UMass is one of the top three universities in R&D spending in the state, and fourth in New England. UMass is a national leader in patents awarded on the basis of its faculty research, as well as in converting those innovative products into licensing revenue.



Contact: Jan Brogan 781-467-9900