Fitch Rates Texas Christian University's Refunding Bonds 'AA-'.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 Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns an 'AA-' underlying rating to the $40 million Red River Education Finance Corporation Higher Education higher education Study beyond the level of secondary education. Institutions of higher education include not only colleges and universities but also professional schools in such fields as law, theology, medicine, business, music, and art. revenue bonds (Texas Christian University Texas Christian University, at Fort Worth; Christian Church (Disciples of Christ); coeducational; opened 1873 at Thorp Spring, chartered 1874 as Add Ran Male and Female College. It assumed its present name in 1902 and moved to Fort Worth in 1910. Project) series 2006. Fitch also affirms the 'AA-' and 'AA-/F1+'on outstanding parity bonds listed below. The Rating Outlook is Stable. The bonds are expected to be sold on or about Nov. 28 through negotiation by JPMorgan and Estrada Hinojosa & Company, Inc. Bond proceeds will be used to refund a portion of the outstanding series 1997 Fort Worth Higher Education revenue bonds, (Texas Christian University Project), series 1997. The long term 'AA-' rating reflects Texas Christian University's (TCU (Transmission Control Unit) A communications control unit controlled by the computer that does not execute internally stored programs. Contrast with front end processor, which executes its own instructions. ) increasing enrollment, large endowment and substantial liquidity. Total university headcount enrollment was 8,865 for fall 2006, which represents a 1.3% increase from the previous fall semester and a 9.8% increase since fall 2002. The endowment, $1.06 billion as of Sept. 30, 2006, is significant and represents an endowment per full time equivalent of $129,100. Available funds, which include unrestricted and temporarily restricted cash and investments, are significant and provide strong liquidity for TCU. As of May 31, 2006, available funds were $876.9 million, and would cover over 3.9 years of fiscal 2006 unrestricted expenses. The short term 'F1+' rating affirmation on the outstanding variable rate demand reflects the level of investments that would be available in the event of a failed remarketing of the variable rate bonds (VRDBs). As of Sept. 30, 2006, TCU had identified $153 million of fixed income securities and $150 million of dedicated bank lines of credit which would provide internal liquidity for TCU's outstanding $130 million VRDBs. TCU also has $30 million of outstanding VRDBs with a term that expires in 2009. The coverage of VRDB VRDB See: Variable-rated demand bond exposure, excluding the 2009 term, and including principal and accrued interest Accrued Interest The interest that has accumulated on a bond since the last interest payment up to but not including the settlement date. There are two methods for calculating accrued interest: 1) 360-day year method, used for corporate and municipal bonds. on $130 million at the maximum rate of 15% for 30 days, is 2.3 times (x). The major concerns are TCU's limited revenue diversity and high debt burden. Tuition, fees and student generated revenues through auxiliary services represent approximately 73% of TCU's fiscal 2006 unrestricted revenues. The concern over the heavy reliance is partially mitigated by TCU's growth in enrollment and significant endowment fund. TCU's scheduled pro-forma maximum annual debt service (MADS) of $13.9 million would consume 5.6% of fiscal 2006 revenues. Additional debt issuance is expected to be minimal, with $20 million expected in 2007. Fitch believes that the debt burden is manageable given the significant level of financial assets Financial assets Claims on real assets. of TCU. Fitch affirms the following ratings: --Red River Education Finance Corporation Higher Education (Texas Christian University Project) revenue bonds, series 2005 at 'AA-'; --Red River Education Finance Corporation Higher Education (Texas Christian University Project) variable-rate demand revenue bonds, series 2000 at 'AA-/F1+'; --Red River Education Finance Corporation Higher Education (Texas Christian University Project) variable-rate demand revenue bonds, series 2001 at 'AA-/F1+'; --Red River Education Finance Corporation Higher Education (Texas Christian University Project) variable-rate demand revenue bonds, series 2006 at 'AA-/F1+'; --Fort Worth Higher Education (Texas Christian University Project) revenue bonds, series 1997 'AA-'. 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. |
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