Emporia State University, KS Revenue Bond Rating Lowered To #A-# From #A# On Deteriorating Financial Resource Ratios

Stocks and Financial Services Press Releases Thursday May 17, 2018 09:25
CENTENNIAL--17 May--S&P Global Ratings

CENTENNIAL (S&P Global Ratings) May 16, 2018--S&P Global Ratings lowered its long-term rating on Emporia State University (ESU)'s series 2010J revenue bonds issued for ESU by the Kansas Development Finance Authority (KDFA) to 'A-' from 'A'. S&P Global Ratings also withdrew its ratings on ESU's 2001B student recreation facility revenue bonds and on the series 2005F residence hall revenue bonds because these bonds were refunded with proceeds of the series 2017D bonds.

The downgrade reflects our view of a material deterioration in the university's financial resource ratios due to the issuance of $36.075 million series 2017D bonds issued in December 2017 (not rated). "The issuance more than doubled ESU's total debt and the university's resulting weaker financial resource ratios are more consistent with those of other 'A-' rated institutions," said S&P Global Ratings credit analyst Amber Schafer. We believe ESU's enrollment base and consistent financial operations support the 'A-' rating. The outlook is stable.

The stable outlook reflects our expectation that during the two-year outlook period, ESU's demand profile will stabilize; financial operating results will be at least breakeven on a full-accrual basis, state appropriations will remain relatively stable, and resources will remain consistent. No additional debt is expected. Consideration of a positive rating action during the outlook period would require strengthening in ESU's enrollment and demand profile, and growth of financial resources, all with consistent positive financial operations.

We could take a negative rating action during the outlook period if enrollment continues to fall such that operational performance is negatively pressured, if available resources weaken materially, or additional debt is issued, though we do not currently expect this, without commensurate growth in available resources. Certain terms used in this report, particularly certain adjectives used to express our view on rating relevant factors, have specific meanings ascribed to them in our criteria, and should therefore be read in conjunction with such criteria. Please see Ratings Criteria at www.standardandpoors.com for further information. Complete ratings information is available to subscribers of RatingsDirect at www.capitaliq.com.

All ratings affected by this rating action can be found on S&P Global Ratings' public website at www.standardandpoors.com. Use the Ratings search box located in the left column.

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