NEW YORK (Standard & Poor's) May 6, 2008--Standard & Poor's Ratings Services
revised its outlook to positive from stable on Delaware Economic Development
Authority's variable-rate revenue bonds issued for St. Andrew's School of
Delaware Inc. At the same time, Standard & Poor's affirmed its 'AA/A-1+'
rating on Delaware Economic Development Authority's (St. Andrew's School)
variable-rate demand bonds series 2002 and series 2004. The rating outlook
revision reflects continued strong financial operations, demand, and endowment
performance.
The 'AA/A-1+' rating reflects the institution's solid adjusted financial
operations, generating a 7.8% surplus in fiscal 2007; impressive liquidity
with unrestricted resources of $173 million or 875% of operations and 564% of
debt; strong demand with a fall 2007 acceptance rate of 31% and matriculation
rate of 62%; and endowment market value of $205 million with an actual
spending rate below its 5% spending policy. The short-term rating reflects the
Bank of America N.A. liquidity facility being extended to Aug. 26, 2008.
"The positive outlook reflects our expectation that St. Andrew's School
will continue to demonstrate strong demand; exhibit favorable financial
performance based on generally accepted accounting principles, despite
additional expenses associated with depreciation; and maintain impressive
liquidity," said Standard & Poor's credit analyst Blake Cullimore. "It also
reflects our expectation that, while the school has significant capital plans,
new debt will be limited with the majority of costs funded through a capital
campaign that will not lead to a dilution of balance sheet resources," Mr.
Cullimore concluded.
Offsetting factors include small, though incrementally growing enrollment
and a somewhat high debt burden with a bullet maturity in 2034.
St. Andrew's school is a small coeducational private independent boarding
school located in Delaware. Conservative budgeting practices and the limited
use of debt have allowed the school to achieve surplus operations on an
adjusted basis over the past several years, while increasing its investment in
plant through significant expenditures on renovations and deferred
maintenance. Demand remains strong as does the schools commitment to financial
aid and shaping a diverse class of students. The school does not account for
depreciation at this time. Total debt is approximately $31 million.
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