Fitch Affirms ‘AA’ Rating, Enhances Outlook to Positive
Fitch Ratings has affirmed Ivy Tech Community College’s (Ivy Tech) ‘AA’ bond rating and updated its outlook to “Positive” from “Stable.”
There are three primary bond rating agencies – Fitch, Standard & Poor’s (S&P), and Moody’s. Credit ratings issued by these agencies provide investors with information about the issuer’s ability to meet its financial obligations.
“Ivy Tech’s ‘AA’ bond rating with a positive outlook is a direct reflection of our long-standing commitment to financial stewardship.” Dr. Sue Ellspermann, President, Ivy Tech Community College said. “Our financial strength allowed us to focus on our students and freeze tuition during the pandemic, as well as leverage federal relief funds to provide free textbooks for all students during the 2021-23 academic years. We will continue to invest in our students while working to reduce the cost of higher education.”
Ivy Tech has historically worked with two of the three agencies, Fitch and S&P, to evaluate its ability to meet its debt obligations as it relates to capital. These agencies monitor financial conditions in an ongoing way and conduct a thorough annual review.
“This high-quality rating and positive outlook are a result of the consistent support of the Indiana General Assembly and Governor, combined with Ivy Tech’s proven ability to maintain a strong balance sheet and positive operating margins through turbulent times,” said Dominick Chase, Senior Vice President and Chief Financial Officer. “President Ellspermann and Ivy Tech’s State Board of Trustees have established a systemwide culture of conservative yet flexible and innovative financial management.”
“Management has an excellent track record of managing expenses through enrollment cycles,” the Fitch report states. “The Positive Outlook reflects (Ivy Tech’s) growth in reserves in recent years, consistent operating performance through the pandemic, and very strong debt leverage ratios, which if coupled with sustained enrollment growth beyond the current academic year could support a higher rating over the next 1-2 years.”
Original source can be found here.
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