Financial 4.0: TTU System Receives Top Ratings
The TTU System has superior financial ratings by Moody's, Standard & Poor's and Fitch Ratings.
March 23, 2015 | Written by Doug Hensley
Three of the world’s most influential credit rating organizations have given the Texas Tech University System superior grades based on its leadership, financial acumen and conservative approach.
Moody’s rated the TTU System Aa1 while Standard & Poor’s upgraded the system to AA (positive outlook). Fitch Ratings upgraded the system to AA+ four years ago, said Jim Brunjes, vice chancellor and chief financial officer for the TTU System. The favorable outlooks come as the TTU System prepares to issue approximately $420 million in bonds.
“This recognition means the TTU System is in a league with some other major institutions in terms of finance,” he said. “We are now among the top 20 institutions based on our financial strength, our stability and our conservative approach.”
Moody’s, which now includes the TTU System among the top most financial strong institutions in the country, praised the system’s steady growth of its financial resources through fundraising and consistently positive operations along with growing enrollment that aligns with the system’s strategic plan. Also playing an important role in the upgrade to Aa1 was a healthy state operating budget, capital support and growing brand recognition.
“We are happy that Moody’s acknowledged our growing brand recognition as well as our conservative approach to financial leverage,” Brunjes said.
The overall outlook from Moody’s reflects continued positive operations and state support balanced with a fiscally prudent strategy meant to position the TTU System to reach enrollment targets without undue additional borrowing.
Meanwhile, Fitch Ratings assigned the TTU System its AA+ rating based on its financial strength, manageable debt burden, operating performance, solid balance sheet and sufficient liquidity.
“So many individuals across the TTU System have worked to create and preserve our outstanding financial strength,” Brunjes said. “It is definitely rewarding for Fitch to recognize that strength in our institutions.”
Finally, Standard & Poor’s AA positive outlook rating was based on a handful of factors, including the TTU System’s solid financial resources, its history of positive operating performance, moderate maximum annual debt service and a sizable endowment ($1.18 billion at the end of 2014) compared to peers.
“It’s gratifying to see that Standard & Poor’s recognized a variety of important components, including our wide array of course offerings across our campuses and the diversity of our revenue,” Brunjes said.
The ratings are significant, Brunjes said, because they affirm the TTU System’s financial strategies.
“Our goal is to maintain a strong and stable approach to our finances,” he said. “We’ll continue to be careful not to overextend taxpayer or student funds, and we will continue to monitor our approach to always keep the best interests of our constituencies at the forefront of our plans.”
About the Texas Tech University System
The Texas Tech University System is one of the top public university systems in the nation, consisting of four component institutions—Texas Tech University, Texas Tech University Health Sciences Center, Angelo State University and Texas Tech University Health Sciences Center El Paso—and operating at 12 academic sites and centers. Headquartered in Lubbock, Texas, the Texas Tech University System has an annual operating budget of $1.7 billion and approximately 17,000 employees focused on advancing higher education, health care, research and outreach.
In 2014, the Texas Tech University System’s endowment exceeded $1 billion, total research expenditures were approximately $200 million and total enrollment approached 47,000 students. Whether it’s contributing billions of dollars annually in economic impact or being the only system in Texas to house an academic institution, law school, and health institution at the same location, the Texas Tech University System continues to prove that anything is possible.