Moody's Investors Service rating reflects:

Strengths:

• The University’s large diversified enrollment base, with highly reputable graduate programs and continued healthy growth in net tuition per student; continued strengthening of student demand most directly demonstrated by a ramp-up in yield on admitted students;
• Healthy and highly consistent cash flow generated by the University as a whole stemming from strong performance of health system operations, growing research activities and improved philanthropic support;
• Large financial resource base despite recent investment losses which has been enhanced over the last few years as fundraising and investment returns fueled growth;
• Potential for significant expansion in fundraising success over multiple years, despite a challenging environment as the senior leadership team focuses on investing in development infrastructure.

Challenges:

• Relatively heavy reliance on healthcare operations (64% of total revenue) which has historically been more volatile than other University operating units, although recent performance has been healthy and the University's hospitals are leaders in service area;
• Highly competitive environment for students (demonstrated by low matriculation rate of 25%) may place pressure on future tuition flexibility, although recent enrollment trends have been sustained as the University has lowered its discount rate;
• Capital spending requirements are likely to remain substantial, but several Projects have been delayed or cancelled and it is expected that future borrowing will be moderate.