What would you think if the University of Louisville Foundation issued a $39 million bond for construction of a new building?
Issue: Taxable Fixed Rate Bonds, Series 2013; Rating: Aa2; Sale Amount: $39,000,000; Expected Sale Date: 8/14/2013; Rating Description: Revenue: 501c3 Unsecured General Obligation
Moody’s Investors Service has assigned a Aa2 rating to the University of Louisville Foundation’s (ULF or the foundation) $39.0 million of Series 2013 Taxable Revenue Bonds. The outlook is stable. We have also affirmed the ratings on the foundation’s rated debt. The Aa2 rating and stable outlook reflect ULF’s strategic importance to the University of Louisville (Aa2 negative), solid balance sheet with moderate leverage and strong gift support, offset by dependence on investment income.
* The University of Louisville Foundation has a strategically important role to the University of Louisville (Aa2 negative), supporting the university’s academic mission, research activities, property acquisition and management, and fundraising.
* The University of Louisville’s Aa2 credit profile as one of Kentucky’s leading public universities, with stable enrollment (fall 2012 full-time equivalent enrollment of 18,992) and a comprehensive array of undergraduate and graduate programs, including a school of medicine, law school, and school of business.
* Solid management team providing sound fiscal stewardship and dedication to short and long-range planning and endowment oversight practices, as demonstrated by successes with the ULF $1 billion capital campaign ($832 million received as of 7/31/13) and an office building real estate joint venture at UL’s ShelbyHurst campus, that is currently fully occupied and providing alternative revenue streams.
* Good balance sheet, with total financial resources of $737 million at fiscal year (FY) end 2012. Expendable resources of $343 million cushion pro forma debt an ample 2.9 times. The foundation recorded strong liquidity of 585 monthly days cash on hand as of June 30, 2012.
Is it good that this bond is issued for the UofL Foundation so it remains super-secret and is devoid of transparency?