University President Luis Proenza and David Cummins, the vice president for finance and administration, sent a memo to faculty and staff today explaining Moody's actions:
Dear Colleagues,
We end the year with some good news from the investors service, Moody’s, which has affirmed the A1 rating on our bonds, while upgrading our outlook from “negative” to “stable.” Comments from Moody’s in its investor report include recognition of our:
- Multi-year improvement in operating performance
- Strong reputation in STEM fields of study and research
- Large enrollment base driven by strength in engineering, research, health science, nursing and the honors college
- Healthy cash flow margin in spite of reduced state funding
- Conservative debt structure
Moody’s acknowledged the challenges and pressures facing our university and higher education, in general, as we all cope with state funding cutbacks, implementation of a funding formula tied to higher retention and graduation rates, and a statewide reduction in the number of high school graduates, creating a more competitive environment.
Moody’s also commented on the challenges we face here at The University of Akron due to our significant level of debt, or a “highly leveraged balance sheet” as we have borrowed to fund our campus expansion and the significant improvements that have made us such an attractive urban campus.
While noting that a drop in enrollment this past year presents financial challenges, Moody’s also comments on efforts to attract more prepared students and provide more degree options to non-traditional students (through weekend and evening courses, for example).
It is gratifying that this respected voice in the investor community recognizes our efforts during the last year to meet increasing financial challenges, strengthen our competitive position by responding to market demands and maintain our prominence among public research universities.
Separately, Cummins was quoted in Crain's Cleveland Business about the upgrade:
“It comes down to how well we can manage through the challenges we're currently facing," Cummins said. “I'm encouraged at a time like this that they'd change (our outlook). It's a point of pride for us.”
Media contact: Eileen Korey, 330-972-8589 or korey@uakron.edu