Weekly Market Update
SCHOOL MERGER IN PHILADELPHIA SHOWING EARLY SUCCESS
Thursday, April 19, 2018
Following last year's merger of Thomas Jefferson University with Philadelphia University, the school--which retained the name Thomas Jefferson University--is reporting a rise in donations and undergraduate applications. Additional benefits from the merger include collaboration and partnerships between the school's departments. Notably, Thomas Jefferson University's medical programs are benefiting from Philadelphia University's expertise in engineering, and vice versa. The school's chancellor has said that he has received significant interest in learning about the merger from other universities. Facing mounting financial pressure and declining enrollments, schools around the country appear to be showing a new willingness to consider strategic initiatives like the Jefferson-Philadelphia University merger. The school is working through this and other acquisitions, and saw an operating loss of nearly $30 million in six months ending December 31; however, efficiencies from the consolidation are beginning to emerge.
In Other News
- Lipscomb University received a $23 million gift to fund design and construction of a new business school building. The anonymous donation is the largest in the school's history.
- Reacting to low or negative government bond rates in their own countries, international investors have been drawn to U.S. municipal bonds.
- The U.S. Libor replacement, SOFR, has incorrectly included certain repo transactions in its first few weeks in the market, according to the Federal Reserve bank of New York.
- Kent State University is using a combination of public-private partnerships and philanthropy to finance new academic buildings. In this model, developers receive gifts and donations as revenue instead of the more customary project generated fees.
- As an alternative to an advance refunding, the University of Dayton is using a forward delivery structure to refund outstanding bonds ahead of the call date.
- Brown University received a $100 million gift to fund neuroscience research at the school's Institute for Brain Science.
- Rice University is investing $100 million to create a new innovation hub in Houston, focused on data science and digital technologies.
Rating Agency Update
- Moody's affirmed Florida State University's Aa2 rating. The outlook is stable.
- Moody's affirmed City University of New York's Aa2 rating. The outlook is stable.
- Moody's assigned Aa3 to University of Cincinnati's Series 2018A and 2018B General Receipts Bonds and 2018C Floating Rate Notes. The outlook is stable.
- Moody's affirmed Clark Atlanta University's Ba2 rating. The outlook is revised from stable to positive.
- Moody's affirmed Southern Methodist University's Aa3 rating. The outlook is revised from negative to stable.
- S&P affirmed Juniata College's BBB+ rating. The outlook is revised from stable to negative.
- S&P affirmed University of North Carolina at Pembroke's A- rating. The outlook is stable.
- S&P affirmed Purdue Research Foundation's AA- rating. The outlook is stable.
- S&P affirmed Houston Baptist University's BBB- rating. The outlook is stable.
- S&P assigned AA- to Case Western Reserve University's Series 2018 Refunding Bonds. The outlook is stable.