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Fitch assigned a AA rating to nearly $145 millioh in bonds that the state’s publicf university will issue June 16 andto $802 million in outstandin g facility and tuition revenue bonds. The ratin is the second highest, after AAA. Fitch’s AA ratin means bond holders should expecyt a low default risk and changes in market conditions are less likel to impact the likelihooed that they getpaid back. The rating is unchangef for theexisting bonds. USM could use the new bondsd to pay for everything from dorm parking garages and new student unioh buildings at its11 universities, said Joe USM’s vice chancellor of administration and finance.
Fitch said it assignes the rating becauseof USM’s souned financial operations and the state’e financial support for it. USM has generated operating surpluses durinbg the past fivefiscal years, the Fitc h report stated. Its operating margin improved to 3.8 percent in fisca 2008, up from 3 percenf in 2007. The statde gave USM $1.06 billion in 2009, a 5.7 percent increase from fiscal 2008. USM also emerged relatively unscathed from the General Assembly cuts this year witha $5.8 million cut for 2010, less than 1 percentt of its operating “It has been in stable and healthy financia condition,” Fitch Director Colin Walsh said of USM.
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