Marshall’s Board of Governors received a strong financial
report from the university’s auditors during a meeting on the Huntington campus
last week. Also, the bond rating firm Fitch Rating has has given an AA- rating
to new revenue bonds to be issued by Marshall University’s Board of Governors at
an expected issuance amount of $50 million. The new rating represents an upgrade
from the previous rating of A+.
According to the accounting firm of Deloitte and Touche, LLP, Marshall’s unrestricted net assets were 20 percent of the school’s operating expenses for Fiscal Year 2010-2011. Mary Ellen Heuton, MU’s interim chief financial officer, said the report is an indication of the strong financial health of the university.
“We are in a period of time in the financial world where bond ratings are generally on the down side, not just in the private sector, it is also happening in the non–profit area,” said John Hess, vice chairman of Marshall’s Board of Governors. “It is truly remarkable that we would get upgraded at this time, which indicates that our fiscal management has been outstanding. We should all take great pride in what this board and administration has accomplished.”
Marshall will use the debt to help finance capital improvement projects on or near the Huntington campus. The West Virginia Higher Education Policy Commission gave Marshall’s board permission to finance the bonds on Oct. 13.
The projects are a biotechnology incubator and applied engineering complex; an indoor athletic complex; a multi-floor parking structure; a soccer stadium complex; a fine arts incubator-visual arts project; a modern academic instructional (high technology) facility, and land acquisition and demolition.
The bonds are expected via negotiated sale on or about Nov. 3.
Fitch said the ratings reflect:
Renewed student demand for auxiliary facilities, revenues from which provide approximately 79.3 percent of the pledged total for fiscal 2012, which recovered in fall 2011 to a healthy and sustainable level;
Broadened Security Pledge. The inclusion of additional revenue streams in the security pledge to ensure adequate debt service coverage, limiting potential reliance on the university’s legally available funds further supports the AA- rating.
A strong University Operating Profile. The pledged revenues
are fundamentally linked via a joint mission to Marshall University, which
demonstrates historically positive operating results, a sound demand profile
and recently improved liquidity.
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