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University of Akron Gets Caution on Bond Rating

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The University of Akron’s credit rating is still in good standing, but a leading bond-rating agency has a message for the school: Watch your debt to revenue ratio. ideastream®’s Tasha Flournoy has more.

Friday, January 25, 2008 at 6:00 am

The university has an A2 credit rating, which is pretty good, but if it continues to spend more than it earns, the rating could drop. That’s according to a report by Moody Investors Services that changed the university’s financial outlook from “stable” to “negative.”

Diane Viacava is a Moody analyst who worked on the report. She says the construction of a new 30 thousand seat stadium and other campus projects are driving up debt, and that might impede the school’s ability to balance its budget. But Viacava says Moody’s outlook is just a caution.

Diane Viacava: which is you know you need to watch this because we are concerned enough to change the outlook. But you know it may develop and it may not develop. It’s not as if it’s a sure thing either.

Akron’s student enrollment is up 10 percent since the fall of 2004, and university officials plan to increase fees to boost new revenue.

Tasha Flournoy, 90.3.

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