After Moody’s upgraded New Jersey City University’s credit rating from negative to stable in February, the same thing that Fitch Ratings did yesterday, the school announced.
By John Heinis/Hudson County View
“The upgrade in NJCU’s Fitch rating is a clear reflection of the significant strides we’ve made in strengthening the university’s financial position and overall stability. This achievement underscores the effectiveness of our leadership team’s ongoing efforts to address challenges, improve operational efficiency, and position the University for the future,” NJCU Interim President Andrés Acebo said in a statement.
“We’re grateful for the State Monitor’s consultative and collaborative support as we work to secure the long-term sustainability of our indispensable mission. Our efforts were bolstered by the State’s substantial stabilization funding investment in NJCU for fiscal years 2024 and 2025 as well as appropriations for operations, pension costs, and outcomes-based measures.”
Fitch also affirmed the ‘BB+’ IDR and bond rating on approximately $136 million of outstanding par (FYE 2023) New Jersey Educational Facilities Authority (NJEFA) bonds, series 2007F, 2010G, 2015A, 2016D, 2021A and 2021B, issued on behalf of NJCU.
Additionally, they indicated that NJCU has roughly $46.5 million in available funds and a total debt of approximately $337 million in debt.
The Fitch-adjusted debt is broken down as $136 million of bonds, $9.5 million notes, $53 million of debt-equivalent lease obligations, and $138 million of debt-equivalent pension obligations.
“A significant portion of NJCU’s adjusted debt is the result of the pre-2022 management team’s major expansion projects that included the addition of a beachside campus in Fort Monmouth, a leased business school campus in downtown Jersey City, a performing arts center, and campus housing. Several of these projects have underperformed, accruing net costs to the university,” Fitch wrote.
“Some of these projects, and others, are targeted to be re-leased or sold as part of asset monetization efforts directed by the state fiscal monitor. If and when realized, these asset monetization efforts are expected to increase NJCU’s cash reserves, reduce leverage, and further improve operating performance.”
