Moody’s Investors Service has revised Northeastern University’s A2 bond rating from a “stable” to “positive” outlook, a forecast that is more favorable than much of the higher education sector nationally and reflects a range of university strengths and strategic investments.
Out of 499 institutions rated by Moody’s, only 15 have been designated as having a positive outlook.
Moody’s, which is one of the three major global credit rating agencies, cited a number of Northeastern’s strengths in upgrading the university’s outlook. These factors include:
• Investments in research growth and faculty hiring
• A strong senior leadership team
• Stable board composition
• Increased fundraising through the Empower campaign
• An enhanced national brand
• The university’s innovative regional campus network
In its report Moody’s cited Northeastern’s solid track record of elevated revenue growth and strong operating cash flow. The credit rating agency also pointed to Northeastern’s strategic revenue diversification and prudent financial management.
“Nearly a decade ago, as other universities retrenched during the recession, we invested in our signature strengths and developed a forward-looking vision that continues to drive us,” said Northeastern President Joseph E. Aoun. “This report from Moody’s—a reputable third-party source of information—is yet another example of how the world is taking notice of our success. I thank everyone in the Northeastern community for making this possible.”
Northeastern’s revised outlook is ahead of the overall higher education sector according to Moody’s, which since January 2013 had forecast the sector as “negative” until revising it to “stable” last summer.
The Moody’s report noted that the growth of Northeastern’s Global Network has enhanced brand awareness and student demand. It recognized the university for its strategic selection of graduate campuses in Seattle, Charlotte, North Carolina, Silicon Valley, and Toronto; the strengthening demand for its undergraduate programs, bolstered by co-op and experiential learning; an increasingly geographically diverse and academically strong group of entering students; and, under President Aoun’s leadership, its continued investment in use-inspired research. The forthcoming Interdisciplinary Science and Engineering Complex, Moody’s noted, “will provide significant additional research and academic space.”
Moody’s report also highlighted that “Northeastern benefits from a strong senior leadership team and stable board composition, with a forward-looking focus on growing and adapting its business and continually improving the university’s brand. The university has been operating under a five-year Long Range Plan laying out the vision for the university with clear goals, action steps, and measurable metrics toward achieving these objectives. Plans are now underway to refresh the strategic and academic plan and update financial forecasts. We expect future initiatives to further support enrollment and research growth and diversification.”