The roughly $150 million in revenue bonds for the campus center project will be issued by the Dormitory Authority of the State of New York for Fordham.
“Both rating agencies note Fordham’s solid enrollments, our prudent management, recent enhanced financial stability, and capacity to manage this additional level of debt,” said Martha Hirst, Fordham’s senior vice president, CFO, and treasurer.
In its annual rating report released on Nov. 19, Moody’s assigned an A2 to Fordham’s proposed bonds as well as its outstanding bonds, and rated the University’s outlook as stable. The positive rating reflects Fordham’s “relatively large scope of operations and very good strategic positioning as a prominent Jesuit institution located in New York City offering a diversity of undergraduate and graduate programs,” according to the report.
Also noted in the Moody’s report were three other positives: Fordham’s increasing enrollment supports rising net tuition revenue, which, in turn, boosts the University’s operating performance. The University’s operating cash flow margin was “a sound 15.5%” in fiscal year 2019. And, surplus operations and strong donor support, with three-year average annual gifts that amount to more than $65 million and well above a peer median of $23 million, continue to build reserves.
Standard & Poor’s (S&P) Global Ratings assigned its “A” long-term rating to the revenue bonds and affirmed its “A” long-term rating on Fordham’s outstanding bonds. The agency’s Nov. 25 report also rated Fordham’s outlook as stable.
Similar to the Moody’s report, S&P cited solid enrollment growth and student quality as evidence of Fordham’s strong enterprise profile. Also noted were the University’s “consistently positive operating margins, concentrated revenue base, solid cash and investments relative to operations and debt, and improving expendable resources.” With regards to Fordham’s “solid management,” the report noted “conservative budgeting practices, success in implementing multi-year strategies, and well-considered reactions to external change.”
The proposed bonds represent the majority of the funding for the campus center project. As the centerpiece of the University’s new campaign focused on the student experience, the project will also be supported with fundraising dollars.