(This is a correction for the release that went earlier
today. It corrects the list of outstanding issues.)
Fitch assigns an 'A' rating to New Jersey Educational Facilities Authority revenue bonds (The Richard Stockton College of New Jersey Issue), series 2006F in the approximate amount of $48,065,000. Fitch also assigns an 'A' rating to The Richard Stockton College's (Stockton College) outstanding revenue bonds listed below. The series 2006F bonds will be sold via a negotiated sale led by UBS Investment Bank on or about Sept. 15. The bonds are expected to be insured. The Rating Outlook is Stable.
The 'A' rating is primarily supported by Stockton College's positive operating margins, moderate enrollment growth and its location in a growth area of the state. For the past five years, the college has generated operating margins even after state funding reductions in fiscals 2003 and 2004. The margin for fiscal 2006 was 12.4%. The operating performance is partially due to enrollment growth. Fall 2005 enrollment of 7,025 was 11.5% higher than fall 2000. Fitch expects enrollment to continue to grow moderately since approximately 78% of the students are from the state's eight southern counties, which are experiencing growth.
The primary credit concerns are the college's relatively high debt burden and the tuition rate increase cap of 8%. Following the issuance of the series 2006F bonds, total outstanding debt is projected to increase to $128 million with maximum annual debt service (MADS) of $8.5 million. MADS would consume 6.9% of the college's fiscal 2006 revenues. The median for 'A' category Fitch-rated colleges is 3.6%; however, the public colleges in New Jersey have higher levels of debt due to a history of scarce funding by the state for capital improvements. During the last two years, the legislature has limited annual tuition increases to 8% as a condition to receiving state aid. Fitch views the cap as limiting the college's flexibility to offset any future revenue shortfalls.
A major portion of the proceeds will be used to fund a residential facility, which is a critical part of the college's strategic plan to attract students. Stockton College historically has had a waiting list of 300 to 500 students for existing housing facilities. The residential operations are fully supported by residential revenues and fees.
Stockton College, located in Galloway Township, 12 miles northwest of Atlantic City, opened in September 1971.
Fitch assigns an 'A' rating to the following outstanding New Jersey Educational Facilities Authority (The Richard Stockton College of New Jersey Issue) revenue bonds:
-- Series 1973D;
-- Series 1988A;
-- Series 2002B;
-- Series 2005C;
-- Series 2005F.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.
Fitch assigns an 'A' rating to New Jersey Educational Facilities Authority revenue bonds (The Richard Stockton College of New Jersey Issue), series 2006F in the approximate amount of $48,065,000. Fitch also assigns an 'A' rating to The Richard Stockton College's (Stockton College) outstanding revenue bonds listed below. The series 2006F bonds will be sold via a negotiated sale led by UBS Investment Bank on or about Sept. 15. The bonds are expected to be insured. The Rating Outlook is Stable.
The 'A' rating is primarily supported by Stockton College's positive operating margins, moderate enrollment growth and its location in a growth area of the state. For the past five years, the college has generated operating margins even after state funding reductions in fiscals 2003 and 2004. The margin for fiscal 2006 was 12.4%. The operating performance is partially due to enrollment growth. Fall 2005 enrollment of 7,025 was 11.5% higher than fall 2000. Fitch expects enrollment to continue to grow moderately since approximately 78% of the students are from the state's eight southern counties, which are experiencing growth.
The primary credit concerns are the college's relatively high debt burden and the tuition rate increase cap of 8%. Following the issuance of the series 2006F bonds, total outstanding debt is projected to increase to $128 million with maximum annual debt service (MADS) of $8.5 million. MADS would consume 6.9% of the college's fiscal 2006 revenues. The median for 'A' category Fitch-rated colleges is 3.6%; however, the public colleges in New Jersey have higher levels of debt due to a history of scarce funding by the state for capital improvements. During the last two years, the legislature has limited annual tuition increases to 8% as a condition to receiving state aid. Fitch views the cap as limiting the college's flexibility to offset any future revenue shortfalls.
A major portion of the proceeds will be used to fund a residential facility, which is a critical part of the college's strategic plan to attract students. Stockton College historically has had a waiting list of 300 to 500 students for existing housing facilities. The residential operations are fully supported by residential revenues and fees.
Stockton College, located in Galloway Township, 12 miles northwest of Atlantic City, opened in September 1971.
Fitch assigns an 'A' rating to the following outstanding New Jersey Educational Facilities Authority (The Richard Stockton College of New Jersey Issue) revenue bonds:
-- Series 1973D;
-- Series 1988A;
-- Series 2002B;
-- Series 2005C;
-- Series 2005F.
Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, 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.