Rating College Debt: A Case Study of Union College

On Friday March 3rd President Stephen Ainlay made an announcement of \u27the largest most expensive most complex project in Union\u27s history.\u27 President Ainlay is referencing the massive rebirth of one of Union\u27s most central academic buildings Science and Engineering. The three-phrase building project will take an estimated three years and cost a total of $100 million. About $50 million of this project will be financed through debt. This comes at a time when Moody\u27s a top rating agency changed the methodology for rating higher education debt. My thesis explores the impact of the new methodology on Union\u27s rating. While the elimination of some criteria like matriculation and selectivity may help Union\u27s rating the addition of other criteria like total wealth negatively impact Union\u27s standing. I find that even after including $50 million of new debt Union should retain its A1 rating. To strengthen Union\u27s case for an A1 rating I conduct a peer comparison to help Union navigate Moody\u27s new rating methodology. I also explore potential ways to structure the additional debt and discuss the pros and cons of each option