Score Motion: Moody’s assigns Aa3 to Florida Worldwide College’s sequence 2021A dormitory refunding bonds; outlook stableGlobal Credit score Analysis – 05 Mar 2021New York, March 05, 2021 — Moody’s Traders Service has assigned a Aa3 ranking to Florida Worldwide College’s proposed $46 million of Dormitory Income Refunding Bonds, Sequence 2021A, to be issued by the State of Florida Board of Governors. We preserve Aa3 scores on the college’s roughly $200 million of excellent rated dormitory and parking bonds. The outlook is secure.RATINGS RATIONALEAssignment of the Aa3 ranking to the dormitory income bonds displays Florida Worldwide College’s broad credit score energy, the usually good efficiency of the dormitory system with sound debt service protection and reserves in addition to the energetic administration of the dormitory system to offset pandemic-related impacts.The Aa3 restricted pledge scores incorporate expectations of FIU’s ongoing sound pupil demand as a big complete public college, enhanced by its designation as a Hispanic-Serving Establishment and the favorable demographics of its location in better Miami (Aa2 secure). Credit score high quality is additional supported by wholesome monetary reserves and manageable monetary leverage, with usually sound pledged income protection of debt service. Challenges embrace comparatively skinny working margins, impacted by the State of Florida’s (Aaa secure) cap on pupil prices, and excessive reliance on probably risky state funding. Whereas whole income and money and funding development developments are favorable, monetary reserves are considerably weaker than friends relative to FIU’s giant working scale. The college faces appreciable enterprise disruption together with to varied auxiliary programs attributable to the coronavirus pandemic, which is a social threat underneath Moody’s ESG framework on account of implications for public well being and security. With materials assist within the type of federal aid, a broad public well being response and shut administration of bills, the credit score impression of the pandemic ought to stay manageable.RATING OUTLOOKThe secure outlook displays expectations that operations will stay usually balanced and that auxiliary programs will preserve sufficient debt service protection from pledged revenues, with federal funds transferred from the college to assist housing system working losses in fiscal 2021. The outlook can be predicated on sound pupil demand and FIU’s potential to regulate bills to potential fluctuations in state working assist, with restricted use of reserves.FACTORS THAT COULD LEAD TO AN UPGRADE OF THE RATING-Materials development in monetary reserves-Elevated liquidity and strengthened working performanceFACTORS THAT COULD LEAD TO A DOWNGRADE OF THE RATING-Sustained weakening of debt service protection from pledged revenues-Decline in unrestricted liquidity-Materials weakening of working performanceLEGAL SECURITYDormitory facility income bonds are secured by and payable from pledged revenues of the Housing System, which incorporates all charges, leases or different prices and revenue from the Housing System amenities, web of Present and Administrative Bills. Pledged revenues of $10.5 million in fiscal 2020 supplied debt service protection of 1.4x, excluding funding from the CARES Act that was used to reimburse housing refunds from spring 2020. Pledged income protection is predicted to skinny to 0.7x in fiscal 2021, although transfers from the college of federal CARES Act and CRRSAA funds to switch misplaced income are anticipated to spice up protection from all funding sources to 1.34x. The housing system held roughly $25 million in reserves at fiscal 2020 12 months finish. Whereas some funds can be expended for a brand new pupil housing challenge, reserves are anticipated to stay above $11 million, exceeding most professional forma annual debt service. Different safety features embrace a further bonds take a look at (previous two fiscal 12 months’s web revenues better than or equal to 120% professional forma most annual debt service) and a sum ample price upkeep covenant.Parking system bonds are secured by and payable from the pledged revenues of the Parking System, that are the online revenues of the Parking System, together with necessary pupil parking and transportation entry charges, a flat charge assessed to all college students on the Modesto Maidique, Biscayne Bay, and Engineering Heart campuses. For fiscal 2020, debt service protection (and MADS protection) from pledged revenues was 1.3x, in step with prior years regardless of modest impression from the pandemic. Protection for fiscal 2021 is predicted to enhance barely, to 1.44x (1.43x MADS), with no deliberate price will increase. Different safety features embrace a further bonds take a look at and a sum ample price upkeep covenant.USE OF PROCEEDSFunds can be used to refund all or a portion of the Sequence 2011A and Sequence 2012A bonds and to pay prices of issuance.PROFILEFlorida Worldwide College is a complete public analysis college, designated as an Hispanic-serving establishment, positioned in Larger Miami, Florida. FIU’s important campus is positioned in west Miami-Dade County (Aa2 secure), with further areas all through the world. The college enrolled virtually 59,000 headcount college students in fall 2020 and generated working income of over $977 million in fiscal 2020.METHODOLOGYThe principal methodology used on this ranking was Larger Schooling printed in Might 2019 and out there at https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBM_1175020. Alternatively, please see the Score Methodologies web page on www.moodys.com for a duplicate of this system.REGULATORY DISCLOSURESFor additional specification of Moody’s key ranking assumptions and sensitivity evaluation, see the sections Methodology Assumptions and Sensitivity to Assumptions within the disclosure kind. Moody’s Score Symbols and Definitions will be discovered at: https://www.moodys.com/researchdocumentcontentpage.aspx?docid=PBC_79004.For scores issued on a program, sequence, class/class of debt or safety this announcement offers sure regulatory disclosures in relation to every ranking of a subsequently issued bond or word of the identical sequence, class/class of debt, safety or pursuant to a program for which the scores are derived completely from present scores in accordance with Moody’s ranking practices. 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