NEW YORK – Fitch Ratings – a globally recognized rating agency – has affirmed an “A+” grade to the Rhode Island School of Design’s $61 million in higher education facilities revenue refunding bonds and rated the outlook stable.
The bonds - series 2012B - were issued by the R.I. Health and Educational Building Corporation and are expected to price via negotiation near the week of June 18.
According to the Fitch report, proceeds of the fixed-rate bonds will refund roughly $55 million in outstanding series 2004 D bonds and pay certain costs of issuance.
Fitch also affirmed the “A+” rating on RISD’s outstanding $88.4 million in variable rate higher education facilities revenue refunding bonds.
“The ‘A+’ rating primarily reflects RISD’s solid financial cushion, supported by conservative budgeting practices and healthy investment returns,” said the Fitch report. “Counterbalancing factors include a high, though manageable, debt burden and substantial concentration in student-generated funding sources.”
The report added that RISD’s “preeminent reputation in fire arts education” supports strong, stable enrollment, which offsets concerns related to high revenue concentration.
Fitch called RISD’s debt burden “high, though manageable,” added that it is offset by the school’s solid debt service coverage and its lack of debt-financed capital plans.