Middlebury Receives Strong Bond Ratings

S&P Global Ratings and Moody’s assigned top-tier ratings to Middlebury’s proposed series 2025 revenue bonds, allowing the College to borrow funds at lower interest rates to finance renovation, construction, and other capital projects.  

Middlebury received a AA rating from S&P and an equivalently high Aa3 rating from Moody’s. The agencies both affirmed the College’s current long-term credit ratings. Middlebury received a stable outlook from S&P while Moody’s revised its outlook from stable to negative, due to ongoing deficits.  

In its analysis, Moody’s credited the College for maintaining $1.6 billion in total cash and investments as of fiscal year 2024 and for providing substantial financial resources to support and sustain its strong market position.

“The affirmation of the Aa3 issuer rating reflects the college’s excellent reputation as a selective liberal arts college, sizable wealth, and good donor engagement,” continued the analysis, which cited consistent deficits as a main reason for the revised outlook.    

Middlebury plans to use the capital raised from the bonds—up to $30 million to be issued by the Vermont Educational and Health Building Financing Agency—to fund the renovations of Stewart Hall and Armstrong Library in Bicentennial Hall to fully convert the space to a Quantitative Center, and to upgrade the Kirk Alumni Center, among other projects.

S&P assessed Middlebury’s financial risk profile as “strong with a sizable endowment and a manageable debt burden” consistent with the rating category. “These strengths are somewhat offset by the trend of full-accrual operating deficits, although we understand that management recently implemented meaningful measures to improve operating results in the near term,” read the report.

“These ratings are a direct reflection of our reputation as a leading liberal arts institution driven by the unparalleled commitment of our students, faculty, and staff,” said David Provost, executive vice president and chief financial officer. “We are already addressing the operating deficit issues addressed in the Moody’s analysis ratings and are optimistic about the College’s financial trajectory.”