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UNIVERSITY SYSTEM'S RATING UPGRADED BY MOODY'S

4/30/2019 - Jackson, Miss.

Moody's Investors Service has revised the outlook of Mississippi Institutions of Higher Learning to stable from negative, citing the university system's strong central financial and operations oversight of its system members, in the Credit Opinion issued Friday.

"The operating stability reflects MIHL's very good central oversight of member universities, including financial reporting and capital and debt management," Moody's noted in the Credit Opinion.

The opinion also noted some of the credit strengths, which include a good system of financial oversight, well-established student demand, modest leverage, a 10 percent cash flow margin in fiscal year 2018, and good fundraising across the universities.

"This upgrade by Moody's reflects two things," said Dr. Alfred Rankins Jr., Commissioner of Higher Education. "The strength of the IHL system approach and the years of hard work of the Board of Trustees developing and implementing strong policies."

Moody's also noted that "the stable outlook reflects expectations MIHL and UMMC will produce generally stable operating performance and cash flow generation while maintaining good unrestricted liquidity and limited new debt plans."

In the opinion, Moody's recognizes the robust research funding brought into the university system, including more than $460 million in fiscal year 2018, representing an increase from $421 million, and the challenges faced by the University of Mississippi Medical Center as the safety net provider for the state. Also noted is the system's internal financial sustainability model.

"Building balance sheet reserves and liquidity is an important goal of the system for its internal financial sustainability model."

The Board of Trustees' Institutional Financial Stability policy was adopted in April 2017 to ensure that the Board provides financial guidance and oversight so that the core functions of instruction, public service, and research can be accomplished in a financially sustainable manner for the long-term benefit of Mississippi.

The system was also recognized for governance and management through a centralized system with strong oversight and planning.

"Mississippi Institutions of Higher Learning has strong oversight of its member universities and UMMC, including fiscal and capital planning, particularly critical with revenue challenges from state funding cuts. The board requires each university and UMMC to provide a three-year business plan, as well as regular quarterly financial reporting and additional information required by the board. For universities under active monitoring, monthly reporting of cash and financial statements are required."

"We are pleased that Moody's Investors Service has upgraded the university system's outlook to stable," said Dr. Rankins. "This speaks to the Board of Trustees' having the policies in place to exercise proper oversight of the universities and to the careful management of university resources, with assistance from IHL staff. Most importantly, this benefits our students and families. When our universities need to borrow funds to enhance the campus living and learning environment, they have more flexibility and pay lower interest rates, which results in lower costs to students. Knowing that the Board of Trustees has a strong financial oversight facilitates sustainability, growth, and quality."

For more information, see the press release issued by Moody's Investors Services.

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The Mississippi Board of Trustees of State Institutions of Higher Learning governs the public universities in Mississippi, including Alcorn State University; Delta State University; Jackson State University; Mississippi State University including the Mississippi State University Division of Agriculture, Forestry and Veterinary Medicine; Mississippi University for Women; Mississippi Valley State University; the University of Mississippi including the University of Mississippi Medical Center; and the University of Southern Mississippi.

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