Another credit agency upgrades ISU's outlook, citing stable enrollment in competitive times
For the second time in three months, a credit ratings agency has upgraded Illinois State University’s financial outlook — a move that could lead to lower borrowing costs down the road.
The Moody’s Investors Service on Monday revised ISU’s outlook, from stable to positive. Moody’s cited ISU’s “consistently positive operating performance through what has been a highly challenging operating environment related to prior state funding inconsistencies followed by the coronavirus pandemic.”
Moody’s said ISU’s enrollment has been “generally stable” in a highly competitive market, “reflecting high demand for ISU's residential experience and diverse program offerings.”
“Management has established a strong track record of budgetary alignment while improving the university's financial flexibility through the growth of its unrestricted liquidity. The positive outlook also reflects the improving credit quality of the State of Illinois, with prospects for continued on-time payments from the state and growth in operating appropriations in the near-term,” Moody’s said.
The move comes just a few months after S&P Global Ratings upgraded ISU’s outlook, also from stable to positive, on ISU's A- rating. That happened in December.
Moody’s also affirmed (or held steady) ISU’s actual ratings. The newly “positive” outlook makes it more likely those ratings will change in a positive direction.
“The recent report by Moody’s is another bit of good news regarding Illinois State’s already strong credit profile,” ISU Vice President for Finance and Planning Dan Stephens said in a statement. “This provides further assurance to our current debt investors and also helps the University attract other lending institutions that can offer us low interest rates to help fund our major capital projects.”