Fitch rates higher ed construction bonds

JACKSON — Fitch Ratings has assigned an “AA” rating to the $55.365-million revenue bonds, series 2011 (Residence Hall Constructions and Refunding Project) issued by the Mississippi State University (MSU) Educational Building Corporation (EBC).

At the same time Fitch affirmed the “AA” rating for the approximately $155 million in outstanding MSU EBC bonds and approximately $125 million in outstanding University of Mississippi (UM) EBC bonds.

A negotiated sale is expected on or about the week of July 4. The proceeds of the bonds will be used to fund the construction, furnishing and equipping of new residence halls, refund and refinance Mississippi State University Educational Building Corporation Series 2001 Bonds.

The rating outlook is “stable.”

Fitch wrote: “The ‘AA’ rating is underpinned by solid operating performance fueled by sound demand across the Institutions of Higher Learning (IHL) academic institutions, healthy liquidity, diverse revenue base and the essential role played by IHL and its member institutions in furthering the state’s education, research and healthcare goals. Counterbalancing credit factors include the IHL’s moderate reliance on state appropriations and limited ability to mitigate reductions with tuition increases given the state of Mississippi’s below average wealth levels.”

Source: Fitch Ratings