LEXINGTON, Ky. (Jan. 25, 2016) — The University of Kentucky has garnered strong financial ratings from the country's leading ratings agencies, citing UK's enrollment growth, vibrant health care system and strong financial management.
The ratings — Aa2 from both Moody's and AA Standard & Poor's — were part of $160 million bond issuance last week on behalf of the $201 million new Student Center project. The Student Center will be completed in early 2018.
It's the second major rating in a row where the university garnered such strong marks for its financial health -- an important indication of the university's reputation as an institution regionally and nationally. The university received an upgrade by Standard & Poor’s in March of 2015, making the University one of only 10 institutions of higher education to receive a rating upgrade in 2015.
"These strong ratings underscore the momentum the University of Kentucky has and its continued transformation as the university for Kentucky," said Eric N. Monday, UK's executive vice president for finance and administration. "We have a campus that more and more is considered a regional and national institution of academic and research excellence as well as a growing, vibrant health system, increasingly renowned for the delivery of advanced specialty care. Moreover, philanthropic partnerships — as evidenced by the renovation and expansion of the Gatton College of Business and Economics — underscore the strong level of private support for our transformation and mission to be one of the best public, residential research institutions in the country.,"
In fact, the ratings agencies in analysis of the bond issuance cited:
--Strong financial management, marked by a low level of debt, only 3 percent of its annual expenses of just over $2.7billion.
--Enrollment growth of nearly 10 percent over the last five years — to more than 30,000 students overall -- fueled in part by a campus transformation with nearly $2 billion in investment in classrooms, research spaces, residence halls and dining facilities
--Strong private support with gift receipts of $118 million and an endowment that has increased by 55 percent over the last 5 years to more than $1.2 billion
--A strong health-care system, now with a $1.3 billion budget and nearly 40,000 annual discharges
However, both agencies also noted as challenges declining state support. UK's state appropriations have been cut by $55 million on a recurring basis since 2008, from $335 million to $280 million this current fiscal year.
"We have tremendous momentum as the state's flagship, land-grant institution," Monday said. "It is important that we continue to prove to our stakeholders — from policymakers and ratings agencies to students families and alums — that we are good stewards of our finances and of their trust in us as their university."