Moody's Investors Service has upgraded the bond rating for Coastal Carolina University's Revenue Bonds. This upgrade paves the way for the University to acquire loans at lower interest rates, resulting in savings for taxpayers.
According to Moody's Investors Service analyst Lori Schomp, the University was upgraded to A2 from A3. The rating upgrade reflects the University's healthy operating margins, favorable service area demographic trends, continued draw from out-of-state students, and rapidly growing revenues.
"In this economic downturn, it is very encouraging to hear positive news from a bond rating agency regarding one of our state universities," said South Carolina State Treasurer Converse Chellis, CPA. "Receiving a credit-rating upgrade is clearly a tribute to the diligent fiscal management and healthy financial condition of Coastal Carolina University. This is certainly good news for the University, its students and South Carolina taxpayers."
Schomp also said the University stands to benefit from the penny sales tax for education enacted by Horry County, the impact of which will be fully reflected in FY 2010. The rating upgrade affects 19.6 million of Series 1999 and Series 2006 Refunding Revenue Bonds.
The stable rating outlook is based on Moody's expectations of continued student market strength, healthy financial position, moderate additional borrowing plans and solid debt service coverage from pledged revenues.
"This rating improvement, coupled with the recent designation as one of America's 100 Best College Buys, means that parents and students can have confidence in spending their college dollars with Coastal Carolina University," said David DeCenzo, president of Coastal Carolina University. "They will know that CCU is a good steward of its funds, both public and private, and that the future financial picture is strong."
Strong regional student demographics and enrollment growth from students outside the region and the state were strengths that Moody's factored into the rating improvement.
This rating upgrade is important to the community because it enables CCU to more easily acquire funding for the next $54 million phase of construction, which includes the new Student Convocation and Recreation Center, the Bryan Family Information Commons at Kimbel Library and the new Science building annex. Those construction projects will create sorely needed jobs in the region.
Marvin Keene, the Marshall D. Butler Distinguished Professor of Finance in CCU's E. Craig Wall Sr. College of Business Administration, said this rating upgrade increases the value of outstanding bonds to trade on the secondary market, making CCU's bonds more credit-worthy. "This rating speaks to the University's success in focusing on financial strength," Keene said.
Coastal Carolina University has achieved a positive turnaround in the area of finance, with the recent announcement of a financial audit that resulted in a "clean" unqualified opinion with "zero findings." This is the second consecutive "clean" audit following a January 2007 annual financial audit that cited a significant deficiency and material weaknesses. Within six months, in June 2008, the University received a "clean" unqualified opinion with zero findings. Most recently, on Sept. 24, 2009, the fiscal year 2009 audit was issued with the same findings.
For more details, visit www. moodys.com, or contact Martha Hunn at 843-349-2962.