Moody’s Investors Service, the New York based investment firm accounting for the University of Central Arkansas’ debt rating, recently released a report naming the school’s status as “stable.”
The new rating, A3, arrived in May, an improvement from the former Baa1, a rating formed under the tenure of former UCA President Lu Hardin.
“The latest Moody’s report positively reflects the tremendous progress UCA has made and continues to make,” said Diane Newton, vice president for finance and administration. “While we are pleased with the previously upgraded rating of A3 with a stable rating, we think when Moody’s receives the University’s audited statements later this year, there will be room for additional upward movement.”
The current rating should provide for favorable interest rates, Newton added.
UCA ended fiscal year 2009 with a cash balance of $3.2 million with no amounts drawn on a line of credit as compared to a net cash position of negative $4.3 million the prior year, the report states.
The report noted that the university’s rating could improve “if the University continues to rebuild financial reserves and maintains student market strength and operating support from the State while limiting additional debt.”
The report credits the university’s rating to the senior management’s resolve “to improve operating cash flow and cash position through revenue management, cost containment and collection of accounts receivable.”
“Management continues to cut expenditures and pursue student accounts receivable more aggressively along with instituting more effective financial control,” the report states.
“We are pleased that Moody continues to recognize our steady march back to a solid financial position,” said UCA President Allen Meadors. “I truly appreciate the University community coming together and helping produce the healthiest financial position at UCA in nearly a decade. When the economy starts to turn around, UCA will be in an excellent position to move forward and build on its outstanding legacy.”