North Carolina State University at Raleigh#s Series 2018 General Revenue Refunding Bonds Assigned #AA# Rating

Stocks and Financial Services Press Releases Friday June 1, 2018 09:12
SAN FRANCISCO--1 Jun--S&P Global Ratings

SAN FRANCISCO (S&P Global Ratings) May 31, 2018--S&P Global Ratings assigned its 'AA' long-term rating to the Board of Governors of The University of North Carolina (UNC)'s series 2018 general revenue refunding bonds, issued for North Carolina State University at Raleigh (NC State) and affirmed its 'AA' long-term rating and underlying rating (SPUR) on the university's existing revenue bonds, as well as its 'AA' issuer credit rating on the university. In addition, we affirmed our 'A-1+' short-term rating on the university's outstanding commercial paper (CP) notes. The outlook, where applicable, is stable.

The university will be issuing approximately $88 million in series 2018 bonds to refund its series 2003B and series 2015 variable-rate bonds.

"The ratings reflect our view of NC State's very strong enterprise profile and very strong financial profile," said S&P Global Ratings credit analyst Phillip Pena. We assessed NC State's enterprise profile as very strong, characterized by solid demand metrics, excellent retention, good student quality, and a capable management team.

We assessed the university's financial profile as very strong, characterized by robust financial performance and good financial policies offsetting a moderately high debt load and modest financial resources for the rating. Combined, we believe these credit factors lead to an indicative stand-alone credit profile of 'aa' and a long-term rating of 'AA'. The short-term 'A-1+' rating is based on the ample liquidity provided by UNC-Chapel Hill to pay the purchase price of CP notes if they are not remarketed.

The stable outlook reflects our expectation that, during the next two years, the university's financial performance and demand for programs will remain healthy, and financial resources will remain slightly below average for the rating category.

We could consider a negative outlook if financial resources ratios were to decline significantly relative to current levels, based on the university's capital plans that it expects to fund with additional debt, or if there was a trend of weakened operating results.

A higher rating would require a significant increase in financial resource ratios levels and continuation of solidly positive operating performance, coupled with the maintenance of stabilized state appropriations.

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 S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.


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