March 18, 2010


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LEWISBURG, Pa. — Moody's Investors Service has affirmed its Aa2 credit rating for Bucknell University debt. This rating is considered very strong by the investment community and will help the University refinance a portion of its debt at a lower interest rate and reduce annual interest payments by about $150,000.

The Aa2 rating assigned to Bucknell's $12.9 million debt offering infers very low credit risk, according to Moody's. Lower credit risk means Bucknell can borrow at a lower interest rate and reduce its debt payments by replacing debt sold earlier at a higher interest rate with debt carrying a lower rate.

At the direction of the Board of Trustees, proceeds from the private university revenue bonds will be used to refund existing debt issued in 1996 and 1998, bringing the University's total outstanding rated debt to $39 million.

Long-term debt
The board adopted a debt policy at its November meeting that provides a structured guide for considering and analyzing the University's incurrence and management of long-term debt.

"The policy will help the University maintain a sound financial position and protect the credit quality of the University's debt," Bucknell President Brian C. Mitchell said at the time the new policy was established. "This policy recognizes that debt is one of the funding options Bucknell can use to help accomplish major strategic goals that require capital."

In assigning the new debt's rating, Moody's cited a stable outlook and the rating agency's belief that the University "will continue to produce positive rating margins and strong coverage of debt service, that financial resources will continue to provide robust coverage of debt, and student demand will remain high."

Low debt load
Compared with its peer institutions, Bucknell's $39 million of outstanding rated debt is considered quite low. In announcing the rating assignment, Moody's cited Bucknell's "conservative debt profile" as one of its key strengths.

Contact: Division of Communications

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