OU has received a stable financial outlook and will maintain an A+ long-term debt credit rating by rating firm S&P's Global Ratings Service.
According to a press release, the report — which is currently only applicable to the Norman campus — considered factors like diverse revenue streams, philanthropic support, capital needs and reduced state funding in its assessment. This positive rating comes after OU received a letter from Cross Neighborhood bondholders warning of possible damage to its financial status as an institution due to its decisions regarding the Cross project.
OU's previous ranking was also an A+, and although the firm's scale is measured up to an AAA+ rating, an A+ score is the most common among universities.
The report stated that, due to the issuance of bonds from OU and Provident Oklahoma Education Resources Group, the university is neither "guaranteeing the debt nor providing any subsidy or other form of operating support for the project," so they do not consider it a part of the university's ratios. In an early August interview, Steve Hicks, president of Provident Oklahoma Education Resources Group Inc., said it is the responsibility of Provident Oklahoma, along with the bondholders, to address the operating expenses and debt service.
"Included in the ratings outlook ... was an acknowledgement of OU’s strong enterprise profile, solid enrollment with modest enrollment increases, strong student quality and good retention," the release said. "The report also noted robust financial management policies and improved operating margins."
Former OU President James Gallogly focused on these financial markers during his 10-month tenure, concentrating his efforts on controlling debt and scrutinizing the university budget.
However, the report also stated these strengths are "diminished somewhat" by available resource ratios that are behind those of similarly rated universities, continuing capital need, reductions in state operating funding support and no state funding for capital.
The report also stated that although the university's senior leadership has experienced turnover recently — after former OU President David Boren's retirement and the subsequent retirement of his successor, former OU President James Gallogly — S&P Global believes the current leadership of interim OU President Joseph Harroz will bring stability due to his prior university experience.
The entire S&P Global Ratings’ outlook can be found on OU's website.