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The credit-rating process can be confusing for colleges, especially those whose bond issues are being rated for the first time. A report by Moody's Investors Service sheds light on the experience.
The report, "Frequently Asked Questions: Higher Education and Not- for-Profit Sectors," clarifies some of the factors that go into rating the credit of colleges. It also explains how Moody's views common transactions in higher education, such as privatizing student housing and operating leases, both of which can influence an institution's credit rating.
Susan Fitzgerald, a senior vice president in Moody's public- finance group, wrote the report. The questions it answers, she says, were those asked most often over the past...