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WCU maintains positive bond rating, outlook from Moody's

By Bill Studenc

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Western Carolina University has retained a bond rating of Aa3 and an outlook of “stable” in a recent review of WCU’s institutional finances by national bond rating agency Moody’s Investor Services.

The positive rating, which arrives during a global pandemic that has negatively affected the financial pictures for many institutions of higher education across the nation, reflects WCU’s “important regional role as a low-cost provider of public higher education with strong liquidity and generous financial support from Aaa-rated North Carolina,” Moody’s said in its announcement.

“Well-managed financial operations provide consistent solid operating performance and very good debt affordability,” Moody’s said. “The stable outlook reflects our expectations that Western Carolina will adjust to any near-term operational and financial challenges posed by the coronavirus pandemic with a manageable impact on financial performance. We continue to expect healthy enrollment and ongoing strong state financial support contributing to continued favorable operating performance.”

The latest review of WCU’s financial strength was prompted by the university’s proposed issuance of special obligation bonds to fund construction of new residence halls on the lower campus to replace two existing high-rise housing facilities.

At its quarterly meeting Sept. 4, the WCU Board of Trustees approved the issuance of special obligation bonds to fund $80 million of the total project cost ($87 million), also endorsing $13.5 million in bonds to refinance debt on the previous construction of the Courtyard Dining Hall, a move that will save the university $2.7 million, said Mike Byers, vice chancellor for administration and finance.

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