James Madison University receives AA- bond rating

Fitch Ratings Inc., a nationally recognized statistical rating organization registered with the U.S. Securities and Exchange Commission, has assigned an Issuer Default Rating of AA- to James Madison University.

The AA- rating reflects Fitch’s opinion on JMU’s credit profile and is supported by strong demand, growing enrollment and positive financial operations. An IDR is a grade given to a bond that indicates its credit quality and the bond rating system helps investors determine institutions’ credit quality. The AA- rating indicates any bond issued by JMU is considered “investment grade” and that JMU has “Very High Credit Quality.” JMU becomes the first comprehensive public university in Virginia to achieve an AA- rating.

Former Secretary of Finance for the Commonwealth Ron Tillet, now of financial adviser Raymond James & Associates Inc. said, “With Fitch Ratings assignment of a AA- credit rating to James Madison University, the institution has independently demonstrated positive financial operations, strong and growing enrollment, a manageable debt burden and sound overall organizational management. The rating further demonstrates James Madison University’s ability to operate at the highest level of accountability with additional autonomy from the Commonwealth of Virginia, thereby further enhancing the university’s efficiency.” Raymond James & Associates in Richmond served as JMU’s adviser in seeking the independent credit rating. 

Representatives of Fitch Ratings visited the JMU campus in late March 2018. They met extensively with university academic, administrative, financial and student management leadership as part of their detailed evaluation of the university.

“JMU always has been in a solid financial position, and a AA- rating from Fitch affirms just how solid that position is,” said Charles King, JMU senior vice president for administration and finance. “And really, achieving this rating is a direct result of offering an extremely high-quality experience to our students. There’s high demand for a degree from JMU, and alumni, parents, students and faculty ought to take a lot of pride in that.”

At this time, the university does not plan to use the rating for any specific debt issue. However, JMU will use the rating to seek “Level III Authority” under the state’s Higher Education Restructuring Act. If approved, Level III authority will allow expanded authority from the commonwealth.