Nazareth College of Rochester, NY Series 2017 Revenue Bonds Assigned #BBB+# Rating

Stocks and Financial Services Press Releases Tuesday November 14, 2017 08:39
SAN FRANCISCO--14 Nov--S&P Global Ratings

SAN FRANCISCO (S&P Global Ratings) Nov. 13, 2017--S&P Global Ratings assigned its 'BBB+' long-term rating to Monroe County Industrial Development Corp., N.Y.'s series 2017 revenue bonds issued for Nazareth College of Rochester and affirmed its 'BBB+' rating on the corporation's outstanding debt issued for Nazareth. The outlook is stable.

The $15.1 million of series 2017 bonds are fixed rate, parity with existing revenue debt, and secured by a general obligation of the college, and will be used to partially fund the construction of a music performance center and an athletic training center, and the replacement of an athletic stadium field.

"The rating reflects our view of Nazareth's adequate enterprise profile and strong financial profile," said S&P Global Ratings credit analyst Phillip Pena.

We assessed Nazareth's enterprise profile as adequate, characterized by improving demand metrics for its academic programs at the undergraduate level, modest growth in enrollment, and solid management and governance that has been proactive in managing demand at the college. We assessed Nazareth's financial profile as strong, highlighted by a trend of decreasing, though still positive, operating margins; solid growth in available resources for the rating category; and a still manageable maximum annual debt service burden following the issuance of the $15.1 million series 2017 debt. Combined, we believe these credit factors lead to an indicative standalone credit profile of 'bbb+', and a final long-term bond rating of 'BBB+'.

The stable outlook reflects our expectation that, over the next two years, Nazareth will likely maintain break-even to positive operating results, will maintain strong available resource ratios, and will continue to improve demand metrics for its undergraduate program. We also expect relative stability in the college's management team, and do not expect a material issuance of debt beyond the series 2017 issuance.

We could raise the rating if Nazareth's demand profile strengthens, operating margins improve materially, and available resources grow significantly to levels we consider commensurate with a higher rating category.

We could lower the rating if operating margins become negative, available resources decline significantly, or Nazareth issues a material amount of debt without a commensurate increase in available resources.

Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com. All ratings affected by this rating action can be found on the S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.


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