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Vanderbilt University’s AAA bond rating affirmed by Fitch

by Nov. 16, 2018, 10:42 AM

(Daniel Dubois/Vanderbilt)

Vanderbilt University’s bond rating continues to be rated AAA—the highest level—by the Fitch Group, a leading credit agency.

In a Nov. 14 news release, Fitch affirmed its top rating to the publicly traded revenue and revenue refunding bonds, totaling $236.5 million, issued on behalf of Vanderbilt by Metro Nashville government.

Among the key rating drivers listed by Fitch were Vanderbilt’s “very strong operating profile” and “solid financial performance.” The report noted the university has generated consistent and solid operating margins since the April 2016 reorganization of Vanderbilt University and Vanderbilt University Medical Center into separate financial entities.

“VU’s operating revenue sources are balanced between net student fees, research grants, VUMC contractual payments, and investment income and distribution,” the Fitch report said. “Fitch expects future performance in line with recent trends.”

The affirmation of the AAA bond rating from Fitch follows on the heels of additional positive news from Moody’s, which upgraded its bond rating for Vanderbilt to Aa1 in July. According to Moody’s, Vanderbilt’s “superior credit strength reflects its ongoing asset growth, enhancing already strong credit fundamentals, and contributing to improved, excellent strategic position.”

Both Moody’s and Fitch describe the university’s outlook as stable.

The third of the three major bond rating agencies, S&P, is expected to release its annual review report before the end of the calendar year.

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