Appalachian State University outlook upgraded by Moody's

Appalachian State University's rating outlook was upgraded to stable from negative by Moody's Ratings Wednesday, citing enrollment increases and net revenue improvements. The outlook affects the school's Aa3 issuer and general revenue bond ratings and A1 millennial campus revenue bond ratings.

The school had $341 million bonds outstanding as of June 30, 2024.

Moody's noted the school's increased enrollment, net tuition revenues and state appropriations. "While there is minimal capacity for additional debt, App State's investment in the plant benefits its brand and strategic positions and demonstrates management's ability to successfully execute complex, long-term plans," Moody's said.

Moody's noted the school has a favorable regional brand as a member of the University of North Carolina system, very strong student demand and operating support from the state. The school has experienced growing cash and investments, backed by donor support providing adequate coverage of operations.

Moody's noted the school's very high financial leverage compared to peers and a highly competitive student market in North Carolina as negatives.

Appalachian State University has its main campus in Boone, North Carolina, and a satellite campus in Hickory. It had 20,600 full-time equivalent students in fall 2024.

Appalachian State University didn't immediately respond to a request for a comment.

It appears that the school's bond debt is rated only by Moody's.

The improved outlook comes as some higher education institutions face credit challenges.