Massachusetts Development Finance Agency — Moody’s withdraws short-term rating for Tufts University, MA’s Series R bonds in conjunction with mode conversion, maintains Aa3 long-term ratings – Yahoo Finance

Rating Action: Moody’s withdraws short-term rating for Tufts University, MA’s Series R bonds in conjunction with mode conversion, maintains Aa3 long-term ratingsGlobal Credit Research – 14 Dec 2021New York, December 14, 2021 — Moody’s Investors Service has withdrawn the VMIG 1 short-term rating on Tufts University, MA’s $34 million of Revenue Bonds, Tufts University Issue, Series R (2018), in conjunction with their conversion to bank purchase mode from term rate mode supported by a Standby Bond Purchase Agreement. The bonds were issued by the Massachusetts Development Finance Agency and have a final maturity in 2048. We maintain Aa3 issuer and debt ratings. Tufts has approximately $980 million of long-term debt for fiscal 2021 (preliminary). The outlook is stable.RATINGS RATIONALETufts’ Aa3 issuer and debt ratings positively incorporate continued sound momentum in Tufts’ brand and reputation. Its appealing location in the economically dynamic greater Boston area offers potential for ongoing synergies in research and economic growth. Tufts’ strong management credibility, financial strategy and risk management, particularly in light of recent increased debt and century bonds, also contribute to excellent strategic positioning and credit quality. Management expects to sustain improved operating cash flow in the 12%-15% range for the near term. While Tufts’ science and healthcare-related programs provide valuable market differentiation, and its relationships with its chief clinical partner, Wellforce, and hospitals, including Tufts Medical Center, support research and education activities, Tufts’ operating model hinders reserve growth and operating performance. Tufts operates veterinary, dental and medical schools but only benefits from clinical revenue from veterinary and dental programs, unlike larger peers with material patient care revenue and stronger balance sheets to support debt and operations. Though absolute wealth is excellent, at over $2.3 billion for fiscal 2020, financial reserves are weak relative to peers, operating scope and debt. Fiscal 2020 spendable cash and investments coverage of debt and operations of 2.1x and 1.7x, respectively, is limited relative to peers. Monthly liquidity is also thin, at 261 days for fiscal 2020, notably below Aa peers. Favorably, financial reserve growth rates are in line with peers, fueled by a $1.5 billion comprehensive campaign currently underway.LEGAL SECURITYBonds are an unsecured general obligation of the university.PROFILETufts University is a highly selective mid-sized private research university located in the Boston area. The university’s prestigious undergraduate program and well-regarded graduate and professional programs help diversify its approximately $1 billion operating base. It enrolled approximately 12,650 full-time equivalent (FTE) students as of fall 2021.REGULATORY DISCLOSURESThe rating has been disclosed to the rated entity or its designated agent (s) and issued with no amendment resulting from that disclosure.This rating is solicited. 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