University of New England makes the grade with an A+ credit rating from Fitch
The University of New England (UNE) recently received an upgraded financial rating from Fitch Ratings, one of the top three credit rating agencies in the U.S. Fitch elevated the university’s overall rating from an “A–” to an “A+,” assigned it an “A+” issuer default rating, and, despite negative financial trends among universities of higher education in the Northeast, rated UNE’s financial outlook as “stable.”
According to the Fitch report, overall financial ratings are derived from the consideration of many factors, including the institution’s financial profile, revenue defensibility, and operating risks. The report names “very strong operating cost flexibility,” “effective, conservative budget management and long-range planning,” and “strategic investments in growth areas” as university attributes responsible for the upgraded rating.
The report acknowledges the difficult financial climate that some colleges and universities currently find themselves in – a climate that has forced the merger and closure of many institutions of higher education across the nation but that has hit New England schools particularly hard. Yet, the report notes that UNE’s performance has remained strong despite the trends that have negatively impacted other universities, stating, “After a period of rapid expansion, Fitch expects UNE will maintain a generally stable enrollment base and moderate revenue growth despite competitive and demographic pressures in the region.”
“Jumping from an ‘A–’ to an ‘A+’ in our Fitch rating is a confirmation of UNE’s stability and longevity, and it really speaks to the nimbleness that UNE has come to be known for,” said university President James Herbert, Ph.D. “These are particularly challenging times for higher ed, but what the Fitch rating indicates is that we have managed wisely, planned strategically, thought on our feet when we’ve needed to, and continued to offer a first-rate education that students and their families know will pay off for them.”
UNE’s Senior Vice President of Finance and Administration Nicole Trufant said that the upgrade demonstrates the security of UNE’s future and is indicative of sound budget management practices that emphasize long-term results. “A Fitch Rating of ‘A+’ is very significant and underscores the forward-thinking practices of the university. This positions us for success going into 2020 and well beyond,” she said.
The revised Fitch rating comes three months after Moody’s Investors Service, another top credit rating agency, elevated UNE’s financial outlook from “stable” to “positive” and cited among UNE’s assets its steady student demand, strong debt affordability, enrollment diversity, and high demand programs.