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Published: Tuesday, 10/3/2006

UT/MUO merger brings upgraded bond rating

Wall Street has reacted positively to the July merger of the University of Toledo and the Medical University of Ohio.

With $194 million in outstanding bonds, UT will benefit from 'positive momentum and potential academic, research, and fund-raising synergies from the merger,' making its debt less risky for investors, concluded Standard & Poor's, a ratings agency.

In September, S&P upgraded $50 million in premerger MUO bonds to high quality from upper medium quality. Moody's Investors Service, the finance industry's other dominant ratings agency, affirmed a similar rating for UT debt in August.

The higher rating lessens the cost of borrowing funds and allows the university to take on an additional $50 million in debt to build up the campus infrastructure, said Dan Morissette, UT's senior vice president for finance and administration.

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