Connecticut Health & Educational Fac. Auth. — Moody’s assigns A3 to Sacred Heart University’s (CT) proposed Series L revenue bonds; outlook stable

Rating Action: Moody’s assigns A3 to Sacred Heart University’s (CT) proposed Series L revenue bonds; outlook stableGlobal Credit Research – 16 Mar 2022New York, March 16, 2022 — Moody’s Investors Service has assigned an A3 to Sacred Heart University’s (CT) proposed $100 million of Revenue Bonds, Sacred Heart University Issue, Series L. The bonds will be issued through the Connecticut Health and Educational Facilities Authority and have an expected final maturity in fiscal 2053. Moody’s has also affirmed the A3 issuer and outstanding revenue bond ratings. The outlook is stable. The university has pro forma debt of about $422 million.RATINGS RATIONALEThe affirmation of Sacred Heart University’s (SHU) A3 issuer rating is supported by its very good brand and strategic positioning, consistently excellent operating performance, and solid liquidity. Prudent financial management and planning will help maintain above 2x debt service coverage even after incorporating the added $100 million of new debt from the Series L bond issuance. However, the proposed debt will further weaken an already elevated debt burden relative to wealth, scale and operations. Prospects for sustaining strong financial operations are enhanced by the economies of scale provided by a substantial $314 million revenue base as well as a relatively flexible expense structure. Further, a combination of high demand academic program offerings, updated facilities, and focus on the student experience will help…