Standard & Poors Affirms Wesleyan’s “AA” Rating

This month, the Standard & Poor’s Ratings Services affirmed its “AA” rating on debt issued by the Connecticut Health & Educational Facilities Authority for Wesleyan. It also declared that the outlook is stable for Wesleyan’s debt rating.

Standard & Poor’s is a leading provider of independent credit risk research, publishing more than a million credit ratings on debt issued by sovereign, municipal, corporate and financial sector entities.

The agency’s report, issued on March 21, cited Wesleyan’s “stable enrollment, continued solid operating surpluses, and adequate financial resources” as rationale for the “AA” rating. This is the second-highest rating given by the agency—with “AAA” being the highest—and indicates, “very strong capacity to meet financial commitments.”

“This is very good news as it reflects the work Wesleyan has done to shore up its finances and continue on a path to fiscal sustainability,” said Nathan Peters, associate vice president for finance. “Fundraising has been very strong and our endowment is above its previous high point before the economic downturn. Everyone on campus is examining how they spend money in order to make the most effective use of Wesleyan resources. It is encouraging that external experts recognize the difficult choices Wesleyan has made during this period to constrain spending while still providing a very high-quality educational experience to our students.”

In its report, the agency notes that Wesleyan has a “strong demand profile with an acceptance rate of 21 percent and a matriculation rate of 35 percent; continued strong operating performance; adequate financial resources; and successful fundraising efforts.” The report also raises a couple off-setting factors, including the strong competition for top students faced by Wesleyan, and a relatively high debt service.

The report notes that the agency has a stable outlook for Wesleyan, adding: “We believe financial resource ratios will likely remain adequate and the university will continue to demonstrate fundraising success.”