The University of Akron is slowly and steadily climbing out of its large debt. As such, Moody’s Investors Services has rewarded the university by upgrading its outlook to stable from negative. Moody’s also affirmed the A1 ratings on the university’s outstanding rated debt.
A few years ago, the University of Akron was more than $50 million in debt. Outgoing University of Akron President Matthew Wilson spoke on Jan. 18 at Quaker Station and said the university will still be posting a deficit of $30 million. Wilson said $18 million of the deficit is covered by the university savings account or "reserved account." He indicated the rest was addressed through debt refinancing that realized accelerated savings and through position control. The university will have a shortfall next year as the university looks for revenue to catch up and adjust expenses.
The Moody’s credit rating is a financial indicator to potential investors of debt securities sees as bonds. The ratings represent the quality of a bond.
"We continue to navigate our challenges, and maintaining the university’s rating and improving its outlook to "stable" is affirmation that we managed our finances and balance sheet very well these past few years," said Nathan Mortimer, CPA, vice president of finance and administration/chief financial for UA, issued in a news release.
Moody’s press release said, "Revisions of the outlook to stable from negative reflects Akron’s demonstrated ability to strengthen fiscal operations by cutting expenses, contributing to improving cash flow margins and debt service coverage."