Duke University,NC's 'A-1+' Comm Pap Rtg Afmd by S&P.NEW YORK--(BUSINESS WIRE)--Standard & Poor's CreditWire 7/1/98--Standard & Poor's today affirmed af·firm v. af·firmed, af·firm·ing, af·firms v.tr. 1. To declare positively or firmly; maintain to be true. 2. To support or uphold the validity of; confirm. v.intr. its `A-1'-plus rating on Duke University, N.C.'s $300 million taxable commercial paper program dated Aug. 15, 1996. Standard & Poor's also affirmed its double-`A'-plus rating on North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. Education Facilities Finance Agency's $35.6 million revenue bonds series 1988A and 1991C, issued for the university. Standard & Poor's affirmed its double-`A'-plus/`A-1'-plus ratings on the agency's $94.1 million variable-rate revenue bonds series 1987A, 1991B, and 1992A. The affirmation of the university's commercial paper rating follows an increase of the program amount to $300 million from the original $100 million established in 1996. The increased amount will provide the university with interim funding for several hospital initiatives (see North Carolina Medical Care Commission, Duke University Hospital analysis in June 29, 1998 CreditWeek Municipal). The `A-1'-plus rating reflects the strengths incorporated into the university's long-term G.O. debt rating (double-`A'-plus) and strong liquidity. The commercial paper is an unsecured obligation of the university and is authorized au·thor·ize tr.v. au·thor·ized, au·thor·iz·ing, au·thor·iz·es 1. To grant authority or power to. 2. To give permission for; sanction: by Duke University's board of trustees board of trustees Politics The posse of thugs who oversee an institution's administration. See Board of directors. for $300 million -- the university currently has board approval to draw up to $287 million. Duke's primary source of cash in the event of an incomplete remarketing is primarily its sizable siz·a·ble also size·a·ble adj. Of considerable size; fairly large. siz  a·ble·ness n. pool of cash, and
treasury and agency obligations.Duke's same-day cash availability was $670 million at March 31, 1998, providing 1.7 times coverage of all unenhanced variable-rate demand obligation variable-rate demand obligation A floating-rate debt obligation that has a nominal long-term maturity as well as an option allowing the investor to put (sell) the obligation back to the trustee, generally at par plus accrued interest. and commercial paper debt. The university expects to restore the amount of the program to the original $100 million level once the long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. is issued for each of the hospital projects. Coverage is expected to increase dramatically at that time. The maintenance of the double-`A'-plus long-term rating reflects strong demand, impressive operations, growth in the university's endowment and the Duke endowment, and the issuance of additional long-term hospital debt totaling $286 million in July 1998 to fund various hospital projects. The rating also reflects high expectations that the rapid changes and acquisitions occurring at Duke Hospital (revenue bonds rated double-`A') will ultimately benefit bondholders despite an interim weakening of the hospital's financial position. Duke University maintains highly competitive undergraduate and graduate programs, as indicated by sustained improvement in the freshman acceptance rate of 28.3% and extremely competitive acceptance rates in the medical and law schools. In addition, the university maintains impressive student quality, with SAT scores of 1377 in 1997. Exceptional financial performance is indicated by Duke's long history of strong operations, as highlighted by a change in unrestricted net assets Net assets The difference between total assets on the one hand and current liabilities and noncapitalized long-term liabilities on the other hand. net assets See owners' equity. from operations of $126.3 million in fiscal 1997. Strong liquidity is provided by the university's endowment. The endowment and all other funds are managed by Duke Management Co., a wholly owned subsidiary Wholly Owned Subsidiary A subsidiary whose parent company owns 100% of its common stock. Notes: In other words, the parent company owns the company outright and there are no minority owners. . The university's endowment was valued at $653.8 million, or $1.2 billion when including similar funds, at fiscal year-end Fiscal Year-End The completion of a one-year, or 12-month, accounting period. Notes: The reason that a company's fiscal year often differs from the calendar year and does not close on Dec 31, is due to the nature of company's needs. 1997. Further growth is anticipated from future fund-raising efforts Noun 1. fund-raising effort - a campaign to raise money for some cause fund-raising campaign, fund-raising drive crusade, campaign, cause, drive, effort, movement - a series of actions advancing a principle or tending toward a particular end; "he supported . In addition, the university annually receives 32% of its income from the investments of The Duke Endowment, valued at $1.98 billion as of Dec. 31, 1997. In fiscal 1997, this support amounted to $30.6 million. The short-term component of the double-`A'-plus/`A-1'-plus rating on revenue bonds series 1987A, 1991B, and 1992A reflects Duke's ability to cover optional and mandatory tenders on its demand variable-rate bonds based on the school's own liquidity. Duke has no future financing plans. LONG-TERM DEBT OUTLOOK: STABLE The outlook on Duke's long-term debt anticipates continued strong admissions and growth in endowment and unrestricted monies. The outlook further anticipates that the qualitative benefits generated by incorporating the new health care entities in the Duke System will generate a financial position commensurate com·men·su·rate adj. 1. Of the same size, extent, or duration as another. 2. Corresponding in size or degree; proportionate: a salary commensurate with my performance. 3. with, or improved from, that of Duke alone in 1997, Standard & Poor's said.---CreditWire
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