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Latest S&P Look at the Books Finds College Finances in Tip-Top Shape

A current look at the college's financial health from Standard and Poor's (S&P) reaffirms its robust standing. In the latest annual examination of the books, S&P analysts affirmed Davidson's AA+ rating with a stable outlook.

In its report to the college, S&P analysts said the AA+ rating reflects excellent student demand for enrollment, strong financial operations with operating surpluses, strong levels of financial resources, and moderate maximum annual debt service burden.

The rating is important in part because it puts the college in an excellent position to issue bonds, said Ed Kania, vice president for business and finance. The college now has $39 million in bonds outstanding. $19 million in bonds was issued in 2000, primarily for construction of the Knobloch Campus Center. $20 million was issued in 2012 for construction of a new residence hall. That issue was significantly oversubscribed, Kania said, noting that the bonds are attractive to investors in part because they are financed through student rental of those rooms.

Kania said the college will probably next seek bonds for projects related to construction of the Integrated Academic Neighborhood, and the college's overall financial strength will be important to get the most favorable terms possible for that initiative. The college is continuing to develop plans for the timing and costs of the construction, and the related borrowing strategies.

The S&P report will help reassure buyers of the value of Davidson College bonds. The report notes, "The stable outlook reflects our view of the college's strong and consistent demand profile, good operating performance, and strong financial resource ratios relative to the rating category.

The report goes into detail concerning the college's financial profile, covering operating performance, financial resources, endowment and fundraising and debt. Among the highlights:

  • The college has a large endowment relative to the size of its student body, with $542 million... and good returns for fiscal 2013.
  • The college's overall fundraising success is a strength, particularly its consistent alumni support that ranks among the top institutions in the nation. For FY 2012, approximately 64% of the college's alumni contributed gifts to the college, including $14 million to the Annual Fund.
  • The college has maintained consistently strong financial resource ratios, particularly in relation to debt.
  • The college has excellent student demand characteristics.
  • The college has demonstrated solid operating performance in recent years, with a $1.2 million operating surplus in fiscal 2012. (The annual budget for next fiscal year is set at $129 million, including debt service on the bonds of just $2.9 million.)

 For a copy of the full report, email Tammy Benshoof.

Davidson is a highly selective independent liberal arts college for 1,900 students located 20 minutes north of Charlotte in Davidson, N.C. Since its establishment in 1837 by Presbyterians, the college has graduated 23 Rhodes Scholars and is consistently regarded as one of the top liberal arts colleges in the country. Through The Davidson Trust, the college became the first liberal arts institution in the nation to replace loans with grants in all financial aid packages, giving all students the opportunity to graduate debt-free. Davidson competes in NCAA athletics at the Division I level, and a longstanding Honor Code is central to student life at the college.

For more information contact Bill Giduz, Director of Media Relations, at 704-894-2244 or