Processing Your Payment

Please do not leave this page until complete. This can take a few moments.

Updated: November 19, 2019

UNE gets credit rating upgrade from Fitch

University of New England campus building in Biddeford Courtesy / University of New England The University of New England, whose main campus in Biddeford is shown here, recently received an upgraded credit rating from Fitch Ratings.

The University of New England has received high marks from Fitch Ratings, on both the school's $85 million in revenue bonds and its overall issuer default rating.

Fitch upgraded the ratings to "A+" from "A-" on the Maine Health and Higher Education Facilities Authority revenue bonds, series 2017A and 2017B, issued on behalf of UNE. The ratings firm also removed those instruments from "Under Criteria Observation."

Fitch also assigned an issuer default rating of "A+" to UNE, which has campuses in Portland, Biddeford and Tangier, Morocco, and revised its rating outlook to "stable" from "positive."

In its announcement, Fitch said the upgrade and "A+" rating reflect a combination of UNE's strengthened underlying credit profile, especially through the material growth in its unrestricted reserves. 

The firm also noted that UNE has consistently set aside a portion of annual cash surpluses, improving its reserves to a level that supports its current ratings. Available funds, consisting of cash and investments not permanently donor-restricted, grew to $224 million as of May 31, from $167 million in 2017.

UNE expects to add another $15 million or more to reserves in 2020, according to Fitch.

Fitch also said that after a period of rapid expansion, it expects the university "will maintain a generally stable enrollment base and moderate revenue growth despite competitive and demographic pressures in the region.

"The university's very strong cost flexibility and budget management should support continued excellent cash flow to fund potential strategic and capital investments with limited leverage."

The report noted that net student charges are UNE's most important revenue source, and that while the institution has fairly strong pricing flexibility, stronger growth in net tuition per student is likely to slow.

No immediate plan to raise debt

UNE President James Herbert tweeted on Monday that the ratings move "indicates that we have managed wisely, planned strategically, thought on our feet when we've needed to, and continued to offer a first-rate education that students and their families know will pay off for them." 

Separately on Monday, a UNE spokesperson told Mainebiz via email that the institution has no plans to go to the debt market in the near future.

Fitch's ratings upgrade comes about three months after Moody's Investors Service elevated UNE's financial outlook from "stable" to "positive."

Sign up for Enews

Related Content


Order a PDF