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Fitch affirms Vanderbilt University’s AAA bond rating

by May. 14, 2020, 10:32 AM

Vanderbilt University Kirkland Tower aerial photograph
(Vanderbilt University)

Vanderbilt University’s publicly traded, long-term bonds continue to be rated AAA—the highest level—by the Fitch Group, a leading credit agency.

In a May 11 news release, Fitch affirmed its top rating on the publicly traded revenue bonds, totaling $128 million, issued on behalf of Vanderbilt University by Metro Nashville government.

Fitch also assigned the university a AAA Issuer Default Rating.

Among the key rating drivers listed by Fitch were Vanderbilt’s “very strong demand” and “well-diversified revenues.”

“Vanderbilt has an excellent market position, with very selective admissions and a national draw resulting in very strong tuition price flexibility,” the Fitch report said. “Revenue sources are balanced between net student fees, research funding, contractual payments from Vanderbilt University Medical Center (VUMC), investment and endowment support and fundraising.”

In addition, Fitch affirmed its highest rating of F1+ for Vanderbilt’s $200 million taxable and tax-exempt commercial paper program.

The report notes that the recent global coronavirus outbreak and related containment measures “create an uncertain environment for the U.S. public finance higher education sector.” However, Fitch describes the university’s outlook as stable.

Vanderbilt University is rated AA+ by S&P and Aa1 by Moody’s, the other two major credit rating agencies.

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