In a significant recognition of the financial stewardship and future direction of Wright State University and increased confidence in the university, Moody’s Investors Service has both upgraded the university’s credit rating from Baa2 to Baa1 and revised the institution’s outlook from negative to stable.
Moody’s Investment Service, which provides international financial research on bonds issued by commercial and government entities, announced May 14 that it has given Wright State the Baa1 rating, an upgrade from the Baa2 rating the university received in 2017.
Equally important, Moody’s has moved its outlook on Wright State from negative to stable. Read the press release from Moody’s (subscription required).
Moody’s said the improved rating was driven by a fundamental strengthening of Wright State’s financial performance and balance sheet position despite continued highly pressured revenue conditions.
During the past five years, the university successfully executed a large-scale right-sizing of expenses to mitigate the outsized revenue declines that were primarily driven by weakness in student demand and exacerbated by the COVID-19 pandemic.
Cash and investments increased nearly 30% between fiscal year 2017 and fiscal year 2020, as expenses and debt declined. Additional growth is expected in fiscal year 2021, and the university has no plans to borrow money in the near term.
“The ratings upgrade signals the strength of Wright State University’s future,” said Greg Sample, the university’s executive vice president and chief operating officer. “Moody’s has acknowledged the specific management actions being taken to stabilize the university’s operating infrastructure and position it for success in the future are moving in the right direction.”
The university has earmarked an additional investment of $1 million for student enrollment and retention efforts and has developed aggressive institutional marketing plans.
Tom Gunlock, chair of the Wright State Board of Trustees, said he is very pleased with the ratings upgrade.
“The announcement by Moody’s affirms the direction Wright State is heading under the strong and stable leadership of President Edwards and her team,” said Gunlock. “We are excited about what’s ahead and look forward to serving our students and the region in the years to come.”