“Moody’s and S&P provided similar commentary, praising the University’s strong financial management during the COVID-19 pandemic and, just as importantly, our ability to bounce back with not only record enrollments, but record fundraising during such a turbulent and uncertain time,” said Martha K. Hirst, senior vice president, chief financial officer, and treasurer of Fordham. “The fact that there were no surprises in the rating agencies’ reports assures us that we have a good pulse on our operating environment, risks, and opportunities for Fordham.”

The nearly $114 million bond transaction with the Dormitory Authority of the State of New York, which began in early September and reached completion in mid-November, is one of the fastest-paced transactions that Fordham’s finance team has completed. Thanks to the transaction, the University was able to refinance $91 million, allowing it to borrow an extra $20 million at no additional cost to the University’s operating budget.

“The opportunity for us in this bonds transaction was twofold,” said Nicholas Milowski, vice president for finance and assistant treasurer. “First, we took advantage of low interest rates before the Federal Reserve began to taper the pace of its bond purchases. Second, we were able to showcase how strong the University has emerged from the pandemic financially. In order to stay open, many colleges and universities were forced to sell part of their endowment, merge with other institutions, incur more debt, or lay off or furlough their employees—but not us. We are in a relatively strong place.” 

Moody’s and S&P’s credit ratings reports spotlighted several strong points about Fordham. Both reports applauded Fordham’s ability to manage its finances during the pandemic, which was also highlighted at the 2021 spring budget forum. In addition, they emphasized the University’s consistent operating performance, solid management, conservative budgeting practices, and growing enrollment numbers, especially in the Class of 2025. 

“Enrollment continues to rise with the exception of a coronavirus related dip in fall 2020 and supports prospects for rising net tuition revenue. That revenue growth along with strong fundraising is boosting operating performance and building reserves,” read the Moody’s report. 

To improve its credit rating, the University should increase its growth in financial reserves to offset future debt and operations expenses, said the reports. But overall, the reports signify a stable outlook for Fordham. 

“We are pleased that the credit rating agencies recognize Fordham’s financial stability, especially during this period of volatility and uncertainty,” said Hirst. “Enhancing the Fordham experience for our students requires a strong financial position, and we fully intend to continue to exercise discretion in how we manage Fordham’s limited resources.”

The roughly $150 million in revenue bonds for the campus center project will be issued by the Dormitory Authority of the State of New York for Fordham.

“Both rating agencies note Fordham’s solid enrollments, our prudent management, recent enhanced financial stability, and capacity to manage this additional level of debt,” said Martha Hirst, Fordham’s senior vice president, CFO, and treasurer.

In its annual rating report released on Nov. 19, Moody’s assigned an A2 to Fordham’s proposed bonds as well as its outstanding bonds, and rated the University’s outlook as stable. The positive rating reflects Fordham’s “relatively large scope of operations and very good strategic positioning as a prominent Jesuit institution located in New York City offering a diversity of undergraduate and graduate programs,” according to the report.

Also noted in the Moody’s report were three other positives: Fordham’s increasing enrollment supports rising net tuition revenue, which, in turn, boosts the University’s operating performance. The University’s operating cash flow margin was “a sound 15.5%” in fiscal year 2019. And, surplus operations and strong donor support, with three-year average annual gifts that amount to more than $65 million and well above a peer median of $23 million, continue to build reserves.

Standard & Poor’s (S&P) Global Ratings assigned its “A” long-term rating to the revenue bonds and affirmed its “A” long-term rating on Fordham’s outstanding bonds. The agency’s Nov. 25 report also rated Fordham’s outlook as stable.

Similar to the Moody’s report, S&P cited solid enrollment growth and student quality as evidence of Fordham’s strong enterprise profile. Also noted were the University’s “consistently positive operating margins, concentrated revenue base, solid cash and investments relative to operations and debt, and improving expendable resources.” With regards to Fordham’s “solid management,” the report noted “conservative budgeting practices, success in implementing multi-year strategies, and well-considered reactions to external change.”

The proposed bonds represent the majority of the funding for the campus center project. As the centerpiece of the University’s new campaign focused on the student experience, the project will also be supported with fundraising dollars.

“These are overwhelmingly positive results for Fordham,” said Martha K. Hirst, senior vice president, CFO, and treasurer. “They affirm that our efforts are focused in the right areas and that we are well-positioned to meet the headwinds facing higher education in these challenging times.”