In the latest “first” associated with the governance transition, the University of Oregon has received credit ratings for its proposed inaugural bond sale.

Credit ratings evaluate the ability of a company or institution to pay investors both principal and interest on investments according to the terms proposed to investors. The newly announced credit ratings for the UO are Aa2 and AA- as rated by Moody’s and Standard & Poor’s, respectively.

“Both agencies assigned high credit quality ratings to the university,” Karen Levear, the UO’s director of treasury operations, said. “Generally, the better the credit rating, the lower the university's cost of borrowing.”

According to S&P, the UO’s rating reflects the university’s strong fundraising program and endowment, stable enrollment, prominence within the state and region, solid operating performance and successful transition from the Oregon University System.  Moody’s also cited the UO’s clear debt policies and management practices, which include strong financial modeling.

“This is a very significant step in the university’s governance transition. The ability to issue our own bonds allows for flexibility to move quickly to meet university needs or to capitalize on favorable market conditions,” Levear said. “There was a thorough review process to obtain the credit ratings, and I appreciate everyone who was involved.”

In December 2014, the UO Board of Trustees authorized the university to pursue $50 million in general revenue bonds. The sale is expected to close in March. 

The funds raised will be used for already approved capital projects, including the Erb Memorial Union and the renovation of Columbia 150.

—By Julie Brown, Public Affairs Communications