Debt Ratings for USM Remain Strong, Despite Challenging Financial Climate in Higher Education

Adelphi, Md. (Feb. 2, 2016) -- The three principal bonds ratings agencies-Standard & Poor's, Moody's, and Fitch-have informed the University System of Maryland (USM) that the USM will maintain its traditionally high ratings with the issuance of $201.33 million auxiliary facility and tuition revenue bonds.

For this series of bonds, USM has received high ratings of AA+ from Fitch Ratings, Aa1 from Moody's Investor Services, and AA+ from Standard & Poor's. All three ratings services give USM an outlook of "stable."

The strong evaluations are noteworthy because the USM has maintained consistently strong debt ratings despite the challenging economic climate that has impacted higher education in recent years. Strong ratings allow the USM to minimize costs of borrowing.

As noted by Moody's Investor Service, the Aa1 rating "reflects the system's important role as the largest provider of four-year public higher education in Maryland diversified among 12 institutions, with solid operating and capital support from the State of Maryland (Aaa stable), good revenue diversity, and consistent positive operations."

The USM benefits from an effective partnership with the administration of Gov. Larry Hogan and the Maryland General Assembly. The state's support of the USM's mission as a system of public higher education has resulted in affordable tuition, support of key initiatives, and the construction of critical capital improvement projects on campuses.

A team led by Joseph Vivona, USM's chief operating officer and vice chancellor for administration and finance, prepared the detailed prospectus in support of this bond issue and met with the ratings agencies in New York.

"It is critical to the economic health of the University System of Maryland that we maintain such consistently strong ratings from the bond agencies. These ratings are a direct reflection on the financial strength, vitality and efficiency of the USM. They also are a tribute to the leadership from our Board of Regents, the careful management at each of our institutions, and the extraordinary preparation by Joe Vivona and his group."

The responsible management of financial resources helps the USM to pursue its core missions in teaching and research.

Contact: Mike Lurie
Phone: 301.445.2719
Email: mlurie@usmd.edu