Moody’s Increases Texas Southern Bond Rating 2 Points

 

Moody's Investors Service has upgraded Texas Southern University's debt rating to Baa1 from Baa3. The rating action affects $107.6 million of fixed rate Revenue Financing System bonds. It is rare for Moody’s to upgrade two rating points at one time.  In fact, this is the second upgrade from Moody’s in the past two years and the third since 2009 for a total increase of five rating-points.

According to the rating service, “The upgrade reflects the renewal of TSU's accreditation by the Southern Association of Colleges and Schools for a 10-year period, elimination of liquidity and renewal risks in its debt portfolio through the refinancing of variable rate demand obligations with fixed rate debt, and continued solid financial support from the Aaa-rated State of Texas.”

President John M. Rudley stated in announcing the rating change, “Vice President Jim McShan and his financial team have worked diligently with all the Bond Rating firms to better position Texas Southern for favorable interest rates for our long-term needs. This new rating will allow us to seek funding for a new residence hall, which is being planned to go on the site of the old YMCA building that was recently torn down.”