Babson College Receives Unprecedented Bond Rating Upgrades from Moody's Investors and Standard and Poor's

BY PR Newswire | MUNICIPAL | 11/29/21 03:30 PM EST

WELLESLEY, Mass., Nov. 29, 2021 /PRNewswire/ --?Moody's Investors and Standard and Poor's have announced significant rating upgrades for Babson College during a year of difficult pandemic challenges for institutions of higher education.

Babson College (PRNewsfoto/Babson College)

Babson College Receives Unprecedented Bond Rating Upgrades from Moody's Investors and Standard and Poor's

Standard and Poor's has upgraded Babson's bond rating to A+ from the prior rating of A. S&P Global Ratings assigned its 'A+' long-term rating on $51 million Series 2021 refunding revenue bonds issued by the Massachusetts Development Finance Agency on behalf of Babson College. The Outlook is Stable.

"We assessed Babson's enterprise profile as very strong, characterized as highly selective with solid retention and graduation rates, good student quality, and a broad geographic draw. We view the management team favorably and effective in maintaining a modest tuition discount rate" (S&P 2021 rating report).

The rating further reflects Babson's:

  • Robust enrollment and demand profile, as demonstrated by stable selectivity and matriculations ratios;
  • Broad geographical student draw, as only about 22% of undergraduate students are from Massachusetts;

Moody's Investors Service has upgraded to A1 from A2 the issuer rating and underlying revenue bond ratings of Babson. Concurrently, Moody's has assigned an A1 to the proposed $51 million in Revenue Refunding Bonds, Series 2021. The proposed bonds will be issued through Massachusetts Development Finance Agency with a final maturity in 2048. The outlook is stable. Highlighted reasons for Moody's upgrade:

"The upgrade of Babson College's issuer rating to A1 from A2 incorporates strong student demand, with total enrollment, entering students, and net tuition revenue exhibiting favorable growth in fall 2021. Babson's very good strategic positioning incorporates its geographic reach, consistently strong graduation rates, and other favorable student outcomes" (Moody's 2021 rating report).

"The Babson community has worked together over many years to achieve these rating upgrades," said Katherine Craven, Chief Administrative Officer at Babson College. "They reflect our collective commitment to financial discipline while putting students first. We accomplished this unwaveringly during a pandemic."

Moody's Corporation operates as an integrated risk assessment firm worldwide. It operates in two segments, Moody's Investors Service and Moody's Analytics. The Moody's Investors Service segment publishes credit ratings and provides assessment services on various debt obligations, programs and facilities, and entities that issue such obligations, such as various corporate, financial institution, and governmental obligations, and structured finance securities. This segment provides ratings in approximately 140 countries.

Standard & Poor's is an American financial intelligence company that operates as a division of S&P Global. S&P is a market leader in the provision of financial market analysis, particularly in the provision of benchmark and investable indices and credit ratings for companies and countries. S&P Global Market Intelligence provides high-quality industry data, financial data, news, analysis, and research to its client investors based on the client's portfolio. Its clients include universities, corporations, government agencies, and investment professionals.

About Babson College
Babson College?prepares and empowers entrepreneurial leaders who create, grow and steward sustainable economic and social value everywhere. We shape the entrepreneurial leaders our world needs most: those with strong functional knowledge, skills, and vision to navigate change, accommodate ambiguity, surmount complexity, and motivate teams in organizations of all types and sizes.? A global leader in entrepreneurship education recognized?by U.S. News & World Report, our undergraduate, graduate, executive programs, and partnership opportunities are tailored to global dynamics.

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SOURCE Babson College

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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