FAMU officials say improved Moody’s outlook reflects university’s financial strength

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On Tuesday, Moody’s Investors Service announced its decision to change its outlook for FAMU from “negative” in 2016 to now “stable.” The outlook revision incorporates anticipated improvement in operating performance and revenue growth with reduced enrollment volatility combined with gains in base state funding. FAMU is closing out 2017 with an increase in fundraising and its highest enrollment increase since 2014 at 9,913 students.

“Through the collective efforts of the Board of Trustees, FAMU Foundation, University administrators, staff, faculty, student leaders, and, of course, our committed alumni and friends, we are working tirelessly to ensure the financial well-being and continued growth of this great institution,” said President Larry Robinson. “We are grateful that Moody’s recognizes our efforts and grateful to everyone who has played a role in this positive outcome for FAMU.”

According to Moody’s, the stable outlook incorporates expectations of stabilizing enrollment, management’s commitment to maintaining operating equilibrium, and stable to growing state support. The stable outlook also reflects the absence of future borrowing plans or plans to reduce flexible reserves and is also predicated on a strong demand for the University’s “dormitory system.” Moody’s also indicates that the University has a reasonable cushion of flexible reserves relative to expenses, as well as relatively low debt.

“The elevation in the Moody’s Outlook Rating illustrates the University’s commitment to sustaining enrollment growth as well as improving our operational and financial performance,” said Wanda Ford, CFO and interim vice president for Finance and Administration. “We are excited about the University’s improvement in its rating of creditworthiness as it allows for greater opportunities to support our students in academic achievement and success.”

Moody’s Investors Service is a leading provider of credit ratings, research, and risk analysis.

According to Moody’s factors that lead to an outlook upgrade, include:

·      Sustained revenue growth combined with more effective enrollment management and enhanced student demand

·      Improved operating performance with reduced volatility and operating cash flow margins

·      Marked increase in flexible reserves with spendable cash and investments to operating expenses sustainably

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