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2021-03-09T08:54:49-05:00
2021-03-09T08:54:48-05:00
2021-03-09T08:54:49-05:00
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Oakland University - News Archive - Moody’s press release: OU bond rating
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(Wednesday, August 8, 2001)Tj
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(Moody\222s press release: OU bond rating)Tj
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(Moody's Investors Service has assigned an A2 underlying rating with a st\
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(General Revenue Bonds, Series 2001, issued through the Board of Trustees\
of Oakland University. Payment on the bonds is)Tj
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(secured by a pledge of general revenues of the University, which include\
tuition, fees and other legally available funds, but)Tj
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(exclude state appropriations. The Series 2001 bonds are expected to be i\
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(strength rating of Aaa by Moody's. Subject to Moody's review of the insu\
rance policy and other relevant documentation, the)Tj
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(bonds are expected to carry the insurer's financial strength rating of A\
aa. The tender features of the Series 2001 bonds are)Tj
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(supported by a standby bond purchase agreement, which is under review an\
d will be assigned a short-term rating by Moody's.)Tj
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(Nonetheless, we will maintain our underlying rating on the University's \
stand-alone credit quality. The A2 underlying rating and)Tj
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(outlook are based on the University's:)Tj
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(Satisfactory levels of financial reserves relative to debt and operation\
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(fundraising success.)Tj
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(STRONG ENROLLMENT GROWTH AND FAVORABLE NET TUITION IN A VIBRANT REGIONAL\
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(Moody's expects that Oakland University's growing prominence in one of M\
ichigan's most affluent counties should enable)Tj
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(enrollment to continue growing steadily and correspondingly bolster fina\
ncial reserves. About 70% of the University's over)Tj
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(15,000 headcount students come from affluent Oakland County \(debt rated\
Aaa by Moody's\) or neighboring Macomb County)Tj
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(\(debt rated Aa1 by Moody's\). Oakland University's comprehensive underg\
raduate programs include the liberal arts, featuring a)Tj
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(prominent theater arts program, health sciences and nursing, teacher edu\
cation, business, and engineering and computer)Tj
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(science. Oakland offers only selected master's and doctoral degree progr\
ams in areas responsive to the demands of the)Tj
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(regional economy such as physical therapy and systems engineering, provi\
ding an effective distinction from competing public)Tj
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(universities in Michigan and strong ties to business partners in the are\
a.)Tj
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(Enrollment of about 10,500 full-time equivalent students has grown by 17\
% over the past four years, and the University)Tj
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(anticipates that it will add an additional 5,000 full time and part time\
students by 2020. Modest but steady increases in projected)Tj
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(area high school graduates, along with a healthy level of appropriations\
from the State of Michigan \(Aaa general obligation bond)Tj
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(rating\), are expected to adequately support planned growth over the nex\
t few years.)Tj
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(The University is only moderately selective, accepting approximately 80%\
of freshman applicants, but it is accepting a declining)Tj
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(percentage of transfer applicants, from 86% in 1996 to only 64% in 2000.\
Student quality measures are increasing and solid)Tj
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(yield rates of over 45% on accepted freshmen and nearly 80% on transfer \
students indicate a certain amount of self-selection)Tj
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(by applicants to Michigan public universities.)Tj
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(OPERATIONS SHOULD CONTINUE TO PROVIDE ADEQUATE FUNDING OF CAPITAL OUTLAY\
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(Moody's expects the University to continue to generate positive operatin\
g margins given expectations of growing enrollment and)Tj
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(a consistent state funding environment. The University's margin has rang\
ed from 4.3% to 5.4% over the past three years,)Tj
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(providing adequate coverage of debt service from net available revenues.\
The University has a favorable net tuition per student)Tj
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(of $4,720, and Moody's believes that the relative affluence of Oakland's\
students provides flexibility to increase tuition charges.)Tj
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(Student derived revenues currently make up a comparatively high 49% of r\
evenues, and will likely increase in the future as)Tj
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(Oakland expands auxiliary activities and overall enrollment. State opera\
ting appropriations fund another 36% of operations and)Tj
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(have increased at a healthy rate for the past few years, although the cu\
rrent fiscal environment portends a smaller increase for)Tj
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(2002. Gifts have grown from 5.1 to 7.4% of revenues since 1996, and the \
University attracts over $3 million per year in)Tj
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(unrestricted operating support.)Tj
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(Supported in part by state capital appropriations, the University has fu\
nded substantial capital improvements over the past)Tj
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(several years. Such improvements added significantly to the University's\
classroom buildings and student residential, activity)Tj
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(and parking space. The current offering will finance various improvement\
s to the campus, including new student apartments, the)Tj
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