S&P, Moody’s affirm strong credit ratings for Morgan State

S&P Global Ratings has affirmed its A+ long-term issuer credit rating, with a stable outlook, for Morgan State University.

The agency cited Morgan’s very strong enterprise risk profile in the credit overview of its most recent annual report, which also noted the university’s substantial increase in student enrollment in recent years and the consistent financial support for Morgan by the state of Maryland.

S&P’s assessment aligns with the latest credit opinion released by fellow Big Three rating agency Moody’s Investors Service last December. Moody’s affirmed its A1 long-term issuer credit rating, also with a stable outlook.

S&P noted Morgan’s diverse credit strengths, including the 29.8% increase in full-time-equivalent student enrollment at Morgan from fall 2019 to fall 2023, with an increasing number of student applications and burgeoning out-of-state enrollment (countering the national trend toward enrollment declines), low university debt and the forgiveness of approximately $33.7 million in HBCU loans and consistent State support for capital and research initiatives, contributing to the modernization of the University’s physical infrastructure.

Moody’s acknowledged the university’s strong strategic position as a moderately large, comprehensive research university and public HBCU with growing enrollment, consistent, growing operating appropriations from the AAA-rated state of Maryland, sustained, significant state capital support underpinning a low age of plant of 11 years with a debt service at a modest 1% of expenses and high five-year average capital spending, programmatic diversity enhanced by multidisciplinary research and fiscal 2023 research activity at 21% of operating expenses.

David LaChina, Morgan’s executive vice president for finance and administration, said the university’s financial positives extend well beyond those noted by Moody’s and S&P and are making a broad impact.

To limit institutional risks, assess processes, improve best practices, promote efficiency and strengthen compliances, Morgan participates in multiple annual audit examinations: by an independent external auditor, by the State of Maryland Legislative Office and by the University’s own Internal Audit & Management Review office.

In April 2023, Morgan implemented an Enterprise Risk Management Program, to identify, assess, evaluate, mitigate and minimize operational and fiscal vulnerabilities across the full spectrum of university functions and appointed a new director of Enterprise Risk Management to support the elevation of operational efficiency and effectiveness using best business practices in higher education.