BVU Earns A/Stable Rating from Standard & Poor's
Standard & Poor's has affirmed its 'A' long-term rating and stable outlook for Buena Vista University. BVU has received an 'A' rating for the last 13 years, and it puts the University in the top-tier of Iowa private colleges.
Standard & Poor's (S&P) Ratings Services has affirmed its 'A' long-term rating and stable outlook for Buena Vista University. BVU has received an 'A' category rating from S&P for the last 13 years, and its A/stable rating puts the University in the top-tier of Iowa private colleges.
According to the report, "The rating reflects our view of BVU's solid financial resources relative to rating category, manageable maximum annual debt service (MADS) burden, and rapid debt maturity profile that should provide long-term budget flexibility."
S&P evaluates several factors when compiling its report, including an institution's amount of debt and the repayment schedule for any outstanding debt, along with major fundraising efforts. The A/stable rating was given to BVU based upon its low amount of debt and rapid rate of repayment.
The University's recent successful capital campaign also played a role in the affirmation of its A/stable rating. The five-year capital campaign, "See Tomorrow: The Campaign for Buena Vista University," was the most ambitious fundraising effort in BVU's history and concluded in October 2013 with gifts and pledges totaling more than $30 million, exceeding the $27.5 million goal.
"We had 5,656 donors participate in our campaign, giving a large number of major and annual gifts of various amounts, which enabled the University to surpass its goal," said BVU President Fred Moore. "These donors contributed not only to the campaign, but to the overall health of the institution. Our ability to maintain our A/stable rating is, in-part, due to their steadfast commitment to the success of BVU."
Noted in the report is BVU's implementation of a formal investment policy, which is considered a best practice by S&P. Also mentioned is BVU's change of its investment manager to Cambridge Associates, LLC, creating a higher level of management for its investment strategy and an investment policy that is more balanced than the previous investment allocation.
"This rating is important to BVU because it is used as a benchmark to determine if an organization is a valuable investment or not," said Elizabeth Merten, vice president for business services at BVU. "A favorable S&P rating shows that we are a credit-worthy institution, which results in lower interest bonds and attracts investors, as we can offer security for their financial investment."
Standard & Poor's Ratings Services provides market intelligence in the form of credit ratings, research and thought leadership. For more information on S&P and its ratings, visit www.standardandpoors.com.