In anticipation of this recent issuance, which brings the College's current outstanding debt to approximately $130 million, the two leading credit rating agencies reviewed the College's credit ratings. An institution's credit rating can signal to investors the financial stability of the institution, as well its ability as service the debt.
Moody's Investor Service reaffirmed its rating of Aaa for the College, the highest favorable rating possible. Standard & Poor's Rating Service upgraded Amherst to AAA, also the highest rating available from the agency.
According to Treasurer of the College Peter Shea, the rating agencies take several factors into consideration when determining a rating. "They look at the financial strength of the College; they look at the quality of the student body and the depth of the applicant pool," he said.
Shea said that even prior to the upgrade from Standard and Poor's, the College's paper was trading very well. Mark Liff, a direct manager with Merrill Lynch, echoed Shea. "Even before the upgrade our ability to remarket Amherst paper was exceptional, and it really reflects the market's understanding of an excellent credit," said Liff.
According to "The Bond Buyer," Standard & Poor's Analyst Mary Peloquin-Dodd said that the upgrade is particularly noteworthy given the current market conditions. "This is a tribute to the operating performance of Amherst. This is the weakest period we've seen for higher education in 10 years, and they're doing great."
Amherst is one of three liberal arts colleges that currently have a AAA rating from Standard and Poor's. Pomona College and Grinnell College are rated similarly. 13 colleges and universities are rated AAA.