July 10, 1997
UA Receives Favorable Bond Ratings
July 10, 1997 NR12-1997
The University of Alaska has once again received very favorable bond ratings by both Moody's Investors Service and Standard & Poor's, two of the largest bond rating agencies in the nation. Moody's gave the university a rating of A1 and Standard and Poor's rating was AA-, the same as they were four years ago.
"We are rated above or equal to all but the few top institutions in the country," said David Creamer, the university's vice president for finance and planning. "We would need very substantial unrestricted endowments and virtually total elimination of deferred maintenance for our rating to be any higher."
The ratings were issued now because the university just sold $10 million in tax-exempt general revenue bonds, on which the low bid was submitted by Seattle Northwest Securities with a 5.4123 percent true interest cost. Proceeds of the bond sale will be used for the International Arctic Research Center (IARC) at the University of Alaska Fairbanks ($8 million) and for student housing at the University of Alaska Southeast in Juneau ($2 million).
Construction has begun on the $32 million IARC facility which was made possible through an Arctic research initiative funded by Japanese governmental agencies and a Japanese non-profit corporation, which provided more than $19 million for the facility. Other funds are coming from the National Science Foundation, State of Alaska, the Fairbanks North Star Borough, the North Pole City Council and private donations. In Juneau, the 84-bed residence hall for UAS students has been completed at a total project cost of $3.2 million. A capital budget appropriation from the state paid the balance of the construction cost.
Moody's Investors Service report pointed out that Alaska state operating appropriations to the university have been stagnant in nominal dollars since 1992 and are projected to decline modestly in 1998, but that the university has employed a combination of revenue enhancing measures, most notably higher tuition rates, and constrained expenditures, to result in balanced annual budgets.
Standard and Poor's said the university's favorable bond rating reflects "the university's position as the sole provider of public higher education in Alaska, with excellent student demand."
FOR MORE INFORMATION: Bob Miller, 907-474-7272