Moody’s Raises YU’s Credit Ranking to B2 With Positive Outlook in a First Since 2013
After seven years in the subpar B3 ranking, Yeshiva University’s credit rating was upgraded by Moody’s Investors Service to the B2 ranking with a “positive” outlook, according to Moody’s June 22 report.
Moody’s, a leading credit rating company, publishes data on commercial and government bonds relating to assets, debts and income, all of which are used to measure credit. Last year, YU’s rating faced its first demoted outlook from “positive” to “stable” since 2014, when it was first placed in the B3 ranking. This year’s report attributed YU’s upgrade to “positive momentum” with revenue from tuition — which enhanced university operations — and improvement in “liquidity and financial resources.”
Although a level higher than B3, the B2 ranking is still considered “speculative and high risk,” which can lead to continued high interest rates for YU from potential lenders.
In 2014, Moody’s downgraded YU from B1 to B3 with a negative outlook, drawing attention to the university’s deteriorating financial condition. Three years later in 2017, Moody’s determined the university’s situation to be “stable,” followed by an upgraded “positive” outlook for the next two years. However, last year, in light of the pandemic that financially crippled institutions across America, Moody’s brought down its outlook of YU to “stable.”
According to the report, YU can further improve its credit rating by sustaining revenue growth, controlling expenses and developing strategies to “invest in capital and programs to strengthen market competitiveness,” among other suggestions.
The report also cautioned that several factors could downgrade YU’s ranking, including a “more rapid” decline in liquidity and a failure to reduce “operating deficits in line with expectations.”
S&P 500, another major credit rating company, also upgraded YU’s credit rating this year from “Negative” to “Stable” in its BBB- category.
As of publication, Vice President of Business Affairs and Chief Financial Officer Jacob Harman did not respond to The Commentator’s request for comment.
Photo Caption: Last year, YU was in the B3 ranking with a “stable” outlook.
Photo Credit: Wikimedia Commons