■The project is highly essential for the institution
and loss of control could be harmful to the insti-
tution’s overall performance and reputation;
■The institution benefits from immediate or even-
tual ownership of the project being financed.
Ultimately, ratings encompass a variety of fac-
tors, of which debt is just one. The inclusion of
additional indirect debt in an analysis of an institu-
tion’s overall credit picture does not necessarily
mean that a rating will change. Most often the rev-
enue-producing nature of projects will be taken intoHigher Educationhttp://www.standardandpoors.com 189Auxiliary Revenue Bond Rating FactorsScope of Financial Legal
Pledge Demand Essentiality Operations Structure
Housing
% of students Historical Commuter or Adequate Additional
housed on occupancy residential coverage bonds test
campus school
Revenues Evidence of Part-time or Rate flexibility Rate covenant
derived waitlist full-time
from standalone student body
facility or system
Competition— Budgeted capital Closed or open
on or off campus expenditures flow of funds
Location of facility Debt service reserve
Renewal and
replacement reserve
Dining
% of students Competition— Commuter or Adequate Additional
participating in on or off residential coverage bonds test
meal plan campus school
Revenues derived Part-time or Rate flexibility Rate covenant
from standalone full-time
facility or system student body
Budgeted capital Closed or open flow
expenditures of funds
Debt service reserve
Renewal and
replacement reserve
Parking
Number of spaces Historical Commuter or Adequate Additional
in system occupancy residential coverage bonds test
school
Revenues derived Defined users— Faculty and/or Part-time Rate convenant
from standalone students visitors student or full-time
facility or system body
Evidence of Budgeted capital Closed or open flow
waitlist expenditures of funds
Competition— Debt service reserve
on or off campus
Location of Renewal and
institution— replacement reserve
urban or rural
Location of
facility(ies)
relative to main
campus building