Fitch Affirms 'A+' Underlying Rtg on Univ of Oklahoma Housing Bonds.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch affirms its rating of 'A+ on the University of Oklahoma's (OU, or the university) student housing revenue bonds, series 2004. The Rating Outlook is Stable. Credit strengths include stable enrollment on the OU Norman campus enrolls approximately 27,000 students and limited university housing capacity. The housing bonds are secured by a pledge of the net revenues of the housing and food services food services Hospital services A 24/7 department in a hospital that provides for the nutritional needs of inpatients–eg, those needing special diets, preparing meals and transporting them to the floor and, through the cafeteria, the hospital staff and department. Housing debt in the future will be secured by a broader revenue pledge of the university. No additional bonds will be issued on parity parity or space parity, in physics, quantity that refers to the relationship between an object or process and the image that it can produce in a mirror. with the series 2004 student housing bonds. Net revenues for fiscal 2005 were $6.2 million and covered debt service by 5.8 times (x). However, the $6.2 million does not include debt service on the series 2004 bonds, which begins in fiscal 2006 at $1.9 million. The first full year of debt service of $3.8 million occurs in fiscal 2007. Net revenues are projected to be $8.2 million in fiscal 2006 and $10.7 million in fiscal 2007 providing debt service coverage of 2.8x and 2.2x, respectively. OU's regents covenant to provide sufficient net revenues to cover debt service at least 1.25x annually. The major credit concerns are the decline in occupancy levels for the last two years and the state's weak demographics The attributes of people in a particular geographic area. Used for marketing purposes, population, ethnic origins, religion, spoken language, income and age range are examples of demographic data. for young adults. The projected change in the number of high school graduates between now and 2017 is 1%. Approximately 70% of OU's students come from the state. However, mitigating mit·i·gate v. mit·i·gat·ed, mit·i·gat·ing, mit·i·gates v.tr. To moderate (a quality or condition) in force or intensity; alleviate. See Synonyms at relieve. v.intr. To become milder. the weak demographics of Oklahoma According to the U.S. Census Bureau, as of 2006, Oklahoma has an estimated population of 3,579,212, which is an increase of 35,770, or 1.0%, from the prior year and an increase of 128,558, or 3.6%, since the year 2000. is the fact that approximately 23% of OU's students come from Texas where the projected growth rate is 16%. Enrollment stability is critical to maintaining housing occupancy levels. For the last two fiscal years, occupancy for university housing has declined from 88.7% for fiscal 2004 to 79.8% for fiscal 2006. OU largely attributes the decline to a decline in the freshmen class. The preliminary fall 2006 freshmen class is approximately 100 students higher than the fall 2005 class, which should translate into a slightly higher occupancy level. Fitch believes that even with the occupancy declines, the required debt service coverage of 1.25x is achievable. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
|
||||||||||||||
Printer friendly
Cite/link
Email
Feedback
Reader Opinion