Standard & Poor’s Global holds Montana State’s credit rating at a strong AA-

BOZEMAN - Standard & Poor's Global has assigned Montana State University an AA- credit rating, retaining for a consecutive year the highest rating the university has ever achieved. S&P Global's announcement, published July 31, said the rating signifies the firm's confidence in the university's continued stability in the years to come.

"We assessed MSU's enterprise risk profile as very strong," the report's authors wrote, pointing to the university's capable and stable management team, its robust research reputation, and the geographic diversity of its student body. "We also assessed MSU's financial risk profile as very strong, with good fiscal stewardship, positive margins on a full-accrual basis, a modest debt burden and growing financial resources."

S&P said other factors contributing to the strong rating include MSU's status as Montana's land-grant institution focused on education, research and outreach to communities, as well as MSU's history of positive operating results and solid financial resources relative to its annual expenses and debt service obligations.

"Montana State University takes seriously its fiscal responsibilities to the public," said Terry Leist, MSU's vice president for administration and finance. "Maintaining this excellent rating reflects the strong financial position of our four MSU campuses combined."

S&P described the university's outlook as stable, writing that "MSU will maintain a solid balance sheet for the rating with increased state support, conservative budgeting and only modest additional debt." The report also projected that MSU will continue to be a competitive choice for in-state and out-of-state students.

Universities often borrow money in the form of bonds to fund large-scale projects, including construction. Bonds are issued and then purchased by investors who are repaid over time with interest. A credit rating gives potential investors a means to determine the risk level of the investment. MSU's high credit rating indicates that its bonds are considered a safer investment, which results in lower interest rates paid by the university.

"Investors can use this information to feel secure and know that our credit rating is strong. They can see that MSU is well suited to meet its financial commitments as we build on our successes as an institution," Leist said.