Bond Rating Raised to A+

Standard & Poor’s issues higher ratings with stable outlook.

March 31, 2011

President Durden greets admitted students and their families at a campus event in February. Dickinson's admissions success contributed to the improved S&P rating.

Standard & Poor’s Ratings Services has raised Dickinson’s bond rating and issuer credit rating from A to A+, the result of the college’s success in a range of areas including admissions, fundraising and investments and financial operations. 
 
“This is a tremendous accomplishment made possible by the hard work of many committed people over the past 12 years,” said Dickinson College President William G. Durden ’71. “The dedication and commitment of our staff, students, faculty, alumni, parents and trustees enabled the college to move through a demanding global financial climate with determination, purpose and accomplishment.”

The S&P report noted a number of positive factors in its rating. Strong demand in the admissions area was evident with a record number of applications (more than 6,000) for fall 2011 and a record first-year class in fall 2010. Student quality also has remained high during this period. In fundraising, the college exceeded its $150 million goal during the First in America campaign. During the recent financial downturn, Dickinson’s strong financial operations and investment success enabled the college to avoid drastic cuts in operating budgets.

“Clearly the systems and strategies put in place by the executive team and the board of trustees when the recession hit has served the college well,” said Thomas A. K. Queenan, vice president for finance and administration. “It was noted that Dickinson’s positive operating performance during the recession was resistant to the volatility experienced by many schools in recent years. This includes the performance and market value of our endowment, which has recovered quite well in fiscal year 2010 and is in the top quartile in the one and three-year periods”

“When our bond rating was BBB+ 12 years ago, we couldn’t be as nimble as we are today and commit funds to the advancement of our students—from academic programs, student life options to financial aid,” Durden said. “ Preserving the best that we have and offering new opportunities for our students comes as a result of our continued financial strength and ascendancy from BBB+ to an A and now an A+ in less than 12 years—and through some arguably severe financial times.”

Durden added that in a time when college students across the country are facing tremendous uncertainty, incoming Dickinsonians can be confident that their first-year experience will be their senior-year experience whether it relates to academics, campus life or financial aid.

The following is the announcement issued by Standard & Poor's. 

Dickinson College, PA Issuer Credit And Bond Ratings Raised To 'A+' 

NEW YORK (Standard & Poor's) March 30, 2011--Standard & Poor's Rating Services raised its issuer credit rating (ICR) and revenue bond rating on Dickinson College, Pa. to 'A+' from 'A'.

The higher rating reflects the Dickinson's demand and financial indicators, which Standard & Poor's considers more in line with an 'A+' rating as well as the college's consistently good operating performance, despite a rising financial aid burden and additional capital needs.

The higher rating reflects the college's general obligation pledge supported by strong demand, with increasing levels of applications and improving student quality along with stable enrollment levels; historically good financial operations; and a history of successful fundraising, including a recently completed capital campaign. Standard & Poor's considers the college's good financial resource levels and manageable debt burden as additional credit strengths.

In Standard & Poor's opinion, the preceding positive rating factors are partially offset by a high level of competition for students from other institutions; reduced operating surpluses in fiscals 2009 and 2010 along with slow growth in net tuition revenue in fiscal 2010 because of additional financial aid expenses; and additional capital needs for campus projects, which could require future additional debt. Standard & Poor's will evaluate those plans as they develop.

"The stable outlook reflects our expectation that during the next two years student demand will remain strong, financial operations will remain positive, and any additional capital needs will result in a modest level of new debt, “said Standard & Poor's credit analyst Mary Peloquin-Dodd. "We believe that Dickinson has the capacity to raise funds for new capital projects," said Ms. Peloquin-Dodd.

Standard & Poor's would have a negative view of any significant weakening in financial performance, a substantial new debt issuance, or a deterioration in financial resources with respect to annual operating expenses or debt. Conversely, Standard & Poor's would have a positive view of continued strength in demand and financial resource growth commensurate with the next highest rating category.

Dickinson College is a traditional liberal arts college located in Carlisle, in central Pennsylvania. The college has $114 million of debt and $2.3 million of capital leases as of June 30, 2010.

Primary Credit Analyst: Mary Peloquin-Dodd, New York  212-438-2079; mary_peloquin-dodd@standardandpoors.com 

 Secondary Contact: Sharon A Gigante, New York  212-438-2008; sharon_gigante@standardandpoors.com