VIEWS: 4 PAGES: 1 POSTED ON: 4/5/2012
Moody’s reaffirms Amherst College’s Aaa debt rating In a report issued on January 25, 2012, Moody’s reaffirmed Amherst College’s current Aaa/VMIG-1 rating on the College’s outstanding debt, the highest rating available. Moody’s also removed the “credit watch” on Amherst College’s credit rating. In December 2011, Moody’s Investors Service maintained Amherst on credit watch for possible downgrade because of concerns about the College’s ability: 1) to remarket $50.2 million of its outstanding Series K-2 bonds; and, 2) to get an extension of a line of credit dedicated to providing liquidity support for its variable rate debt. In early January the College remarketed its outstanding Series K-2 bonds into a 5-year term, locking in a historically low rate for an issuance of that term (1.70%). The remarketing drew new investors to the College’s portfolio and was four times oversubscribed. The College’s strong credit gives it excellent marketability in a turbulent market. The line of credit was extended for a two year term in December 2011. Moody’s originally issued the credit watch in August 2011 during the uncertainty in the credit markets created by the U. S. debt ceiling crisis. At that time the College was planning for the remarketing of its outstanding $40.8 million Series H bonds. The bonds remarketed in September 2011 for a 3-year term at a very favorable interest rate of 1.0%. In eliminating the credit watch, Moody’s assigned a “negative outlook” to the College’s Aaa rating, due, in part, to concerns about the College’s requirements to fund its new science center construction project. The College is confident that it has adequate resources and liquidity for the science center project and other needs. Standard & Poor’s Financial Services has also rated the College’s debt AAA with a “stable outlook”. Peter J. Shea, Amherst College Treasurer, said, “The College will build a remarkable new science center and maintain the financial strength to meet future financial obligations. We also believe our liquidity levels are more than adequate to service our outstanding variable rate debt. We look forward to further discussions with Moody’s as our plans for the science center evolve”.
Pages to are hidden for
"Moody"Please download to view full document