Fitch ratings has assigned an 'AA' rating to $81.1 million revenue financing system (RFS) revenue and refunding bonds, series 2012A and Series 2012B (the bonds), issued by the Board of Regents of the University of North Texas (UNT, or the system).
The bonds are expected to sell via negotiation the week of May 7, 2012. Proceeds of the bonds will be utilized to refinance approximately $44.9 million of tax-exempt RFS Commercial paper (CP) notes, refund $29.8 million of outstanding series 2003 and 2003B bonds, fund various capital improvement projects and a real estate acquisition, and pay various costs of issuance.
In addition, Fitch affirms the following ratings:
--$403 million Board of Regents of the University of North Texas System RFS Bonds at 'AA';
--$100 million authorized tax-exempt and taxable CP program at 'F1+'.
The Rating Outlook is stable.
SECURITY
All legally available revenues, funds, and balance of the system. Pledged revenues exclude state appropriations and other restricted funds.
KEY RATING DRIVERS
STABLE CREDIT CHARACTERISTICS: The 'AA' rating reflects UNT's prudent fiscal management, leading to a consistent positive operating margin; healthy demand; and moderate debt burden.
OPERATING PRESSURES ADDRESSED: UNT's management team proactively addressed reductions in state appropriations (Texas' GO bonds are rated 'AAA' by Fitch) through a combination of revenue enhancement and expense management.
AGGRESSIVE, BUT MANAGEABLE, CAPITAL PLANS: UNT has additional, sizeable capital needs, portions of which will be debt-financed. Concern is partly offset by the system's moderate pro forma debt burden and consistent ability to generate sufficient annual debt service coverage from operations.
INTERNAL LIQUIDITY: The 'F1+' rating is based on UNT's ability to cover the maximum potential liquidity demands on its CP program from internal, highly liquid resources.
Additional information is available at 'www.fitchratings.com'. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
--'Revenue Supported Rating Criteria' (June 20, 2011);
--'Criteria for Assigning Short-Term Ratings Based on Internal Liquidity' (June 20, 2011);
--'U.S. College and University Rating Criteria' (July 14, 2011);
--'Fitch Affirms the University of North Texas' System Revs at 'AA' & CP at 'F1+'; Outlook Stable' (June 23, 2011).
Applicable Criteria and Related Research:
Revenue-Supported Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=637130
Criteria for Assigning Short-Term Ratings Based on Internal Liquidity
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=637129
U.S. College and University Rating Criteria
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=640830
ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE.
Contacts:
Fitch Ratings
Sandro Scenga, +1-212-908-0278
Media Relations,
New York
sandro.scenga@fitchratings.com
or
Primary
Analyst:
Alexander Vaisman, +1-212-908-0721
Analyst
Fitch,
Inc.
One State Street Plaza
New York, NY 10004
or
Secondary
Analyst:
Colin Walsh, +1-212-908-0767
Director
or
Committee
Chairperson:
Douglas J. Kilcommons, +1-212-908-0740
Managing
Director