Dayton Daily News: Wright State bond rating upgraded; Moody’s calls Wright State outlook ‘positive’

University battled declines in enrollment, reserve fund; rating agency applauds ‘budgetary discipline’


Wright State University’s Dayton Campus

Moody’s Investor Services has upgraded Wright State University’s credit rating and revised the university’s outlook from stable to positive, the university announced.

Moody’s, which provides international financial research on bonds issued by commercial and government entities, announced Tuesday it has given Wright State an A3 rating, an upgrade from the Baa1 rating the university received in 2021, and upgraded again from the Baa2 rating in 2017.

“The announcement by Moody’s affirms the direction Wright State is heading under a very strong and stable leadership team guided by President Sue Edwards,” said Tom Gunlock, chair of the Wright State Board of Trustees. “We are excited about what’s ahead and will remain focused on serving our students and the region in the years to come.”

In 2017, the university faced significant financial problems, and there was discussion that the public university could be placed on fiscal watch. The university conducted layoffs in 2018 and cut faculty positions in 2021.

Enrollment has also been an ongoing issue. Wright State saw first-time student enrollment drop from 2,676 in fall 2015 to 1,541 students in fall 2022, a 42% decline. Overall enrollment has fallen about 43%, from 17,070 students in fall 2015 to 9,661 students in fall 2022.

Moody’s said the improved rating was driven by a material strengthening of Wright State’s financial performance and balance sheet position. The continued demonstration of budgetary discipline amid challenging revenue and operating conditions was also cited.

Moody’s reports that Wright State’s net tuition revenue was stabilizing in fiscal 2023 following a multiyear trend of declines, indicating “progress in strengthening student demand.”

Moody’s described the university’s cash reserves as “solid” and “flexible” and said its reserve balance should “continue to provide for strong coverage of both operating expenses and the steadily diminishing levels of debt.”

“Wright State’s A3 issuer rating is supported by its good brand and strategic positioning, strong fiscal management and favorable financial profile,” Moody’s said. “Despite a prior record of enrollment and net tuition revenue declines, the university continues to serve an important role as a large public university provider with an affordable pricing structure, diverse programs and accretive external partnerships.”

Wright State says it has no plans to issue debt in the near term and modest growth is expected in fiscal year 2023.

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