Standard & Poor's Assigns 'A' Rating to Penn College
Published 03.18.2011
Standard & Poor's a leader of financial-market intelligence worldwide has issued an "A" public rating to Pennsylvania College of Technology. This is the first public rating assigned to Penn College, which expects to issue revenue bonds in order to refinance one outstanding series of bonds to achieve economic savings.
Penn College President Davie Jane Gilmour said the "A" rating provides the institution with an opportunity to restructure its current debt in order to save money at a crucial time.
"Our ability to restructure our debt at this time can help us to achieve savings to offset some of the fiscal challenges we and all of higher education are now facing. This news comes at a very good time," she said.
Gilmour said the college Board of Directors has authorized the administration to request that the Lycoming County Authority issue tax-exempt bonds on the college's behalf. The college is obligated for repayment under a loan agreement with the authority. Proceeds from the bonds will be used to refinance the 2000 fixed-rate bonds in order to secure a lower interest payment.
"We hope to secure approximate savings of $2 million through this refinancing," she said.
Standard & Poor's provides information, in the form of credit ratings, indices, investment research, and risk evaluations and solutions, to help investors make informed decisions.
An "A" rating is the third highest of 12 possible S&P ratings. It indicates that S&P believes the institution has a "strong capacity to meet financial commitments," but is "somewhat susceptible to adverse economic conditions and changes in circumstances."
Qualities that S&P indicated were significant in establishing the college's "A" rating included its historically stable financial performance, enrollment and retention, and satisfactory liquidity (measuring expendable resources against expenses and debt) supported by "modest, but consistent" state appropriations.
"To achieve an "A" in our first public rating is significant and it reminds us of how important it is that we continue to make fiscal responsibility and good stewardship of our resources and revenue our top priority," the president stated.