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Moody’s revises Vanderbilt credit outlook upward to positive

Dec. 21, 2015, 8:14 AM

As Vanderbilt University and the Vanderbilt University Medical Center near completion of their transition into separate legal and financial entities, Moody’s Investors Service has revised upward the university’s rating outlook to positive.

The change from the previous stable outlook came Dec. 18 as Moody’s affirmed the university’s Aa2 rating on bonds along with the P-1 rating on its short-term commercial paper program.

The rating agency cited the university’s “excellent student market and research strengths.” It also noted the university’s strong finances and prospects for donor support. The P-1 rating on the commercial paper program “reflects the university’s long-term rating, strong liquidity and able treasury management.”

Moody’s noted the plans to establish the Medical Center as a separate, not-for-profit entity. The positive outlook “assumes that the reorganization will yield substantial, although not complete, risk transfer of the patient care enterprise and materially reduce Vanderbilt University’s debt.”

The separation of the university and Medical Center is expected to be completed within the first few months of 2016.

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