Moody’s Shares Confidence in LMU’s Outlook

Loyola Marymount University got a boost of confidence from Moody’s Investor Service in their most recent credit opinion.

Moody’s, the highly respected credit rating agency that provides financial and risk analysis on corporate and government bonds, affirmed LMU’s “A2” credit rating. Moody’s opinion also resulted in a change in LMU’s outlook from stable to positive. The change in outlook exhibits the university’s “enrollment, attractive program mix, and desirable urban location, which support steady growth in net tuition per student.”

“The positive outlook reflects our expectation that the university’s market position will continue to strengthen supporting growth in undergraduate and graduate enrollment,” Moody’s wrote in their March 23, 2023, report. “It also reflects expectations that strong fiscal management along with rising net tuition revenue will continue to support sustainably strong EBIDA margins and steady to growing flexible reserves.”

“Given the challenges facing private higher education institutions, the change in outlook from stable to positive is fantastic news,” said Fidel Aguayo, LMU vice president of treasury and investment. “In fact, LMU is the only university in its peer group to achieve a positive outlook. The positive outlook is a testament of LMU’s sound financial decisions made by its leadership team and the Board of Trustees.”

Moody’s analysis, which considers the university’s market strengths and challenges, provides a reliable guide for investors. In its assessment, the agency noted “LMU’s operating performance will remain healthy in fiscal 2023. Additionally, strong fiscal oversight with conservative budgeting practices also bolster the prospects for favorable operating performance. Credit quality is constrained by a lack of diversity in its revenue base with 83% derived from student charges.”