U. receives AA rating from S

Ivy League schools get all A's. At least according to Standard and Poor's -- a financial company that issues corporate bond ratings -- which has given each Ivy League school, including the University, a AA rating or better. The University's AA rating, however, places it, along with Brown and Cornell universities, at the bottom of the Ivy League. Harvard, Yale and Princeton universities top the rating charts with AAAs, the highest rating S & P gives. Dartmouth College and Columbia University round out the Ancient Eight with AA+ ratings, one notch above the University. Bond ratings are reviewed every year and are based upon a number of factors, including student demand, endowment size and financial flexibility, according to Lisa Danzig, a director in S & P's municipal finance department. "A AA is a very strong rating," Danzig said this week. The University's rating is one of the lowest in the Ivies because fewer students choose to apply to the University than to other, higher-rated schools, she said. "[Student] demand is probably the cornerstone of the private university rating," Danzig explained. "If you don't have good student demand it's definitely going to catch up with your financial operations." University Associate Treasurer for Investment Lucy Momjian said that bond ratings impact the cost of borrowing money, but said the difference between the cost of a loan for a AAA school and a AA school is "minimal." "As long as I can remember we've been AA," Momjian said. "It's very good." Danzig said the University's rating has not been affected by either the city of Philadelphia's recent fiscal crises or the $19.5 million deficit the University is running this year. "Running a deficit in and of itself does not necessarily change the rating," she said, adding that the University's rating might be endangered if it were to run deficits year after year. Curiously, two Ivies which have had well-publicized problems recently, Columbia and Yale, still rate higher than the University. Danzig said Columbia could emerge from its current financial woes even stronger than when the troubles began. "Columbia definitely has some problems," she said. "They ran a deficit in 1992 and they're projecting deficits, I think, for the next couple of years. [But] Columbia still has very strong demand, good financial operations and a strong endowment." And, she added, "Yale's had a tremendous change in management . . . but that doesn't necessarily mean the bond rating is going [to change]." The University's rating shares the highest rating for a private college or university in Pennsylvania with Swarthmore College. Lehigh, Villanova and Temple universities are rated A, La Salle University is rated A-, and Philadelphia College of Textiles and Sciences has a BBB rating.

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