Bond ratings for Sweet Briar College have increased for the third year in a row, the college reported Monday, continuing on a positive financial outlook trend since it nearly closed four years ago.
S&P Global Ratings, a financial analytics corporation, raised SBC’s long-term credit ranking from B+ to BB- in 2019 and changed its rating outlooks for the college from stable to positive. Sweet Briar’s rating was at BBB- before it almost closed in 2015, bringing its rating down to CCC. Its rating has been increasing gradually since 2016.
The ratings indicate an agency’s likelihood to repay its debts. The highest rating an institution can receive is AAA. Three letters are better than two or one and pluses are better than minuses so the shift from a B+ to a BB- brings Sweet Briar one step closer to BBB, which would bump its rating up to investment grade and significantly lower its interest rate on bonds.
The corporation cited successful stabilization measures taken by Sweet Briar, including a tuition reset in 2018, academic reorganization, reduction of operating expenses and implementation of a multi-year financial plan by the college’s board and administration.
By late 2017, SBC had reduced its employee roster to 254 from 328 before the failed closure. The latest numbers were not available to The News & Advance as of press time Monday.
“In fiscal 2018, the management team has reset tuition to aid student affordability and solidly reduced operating expenses and the full-accrual deficit compared with the previous year,” a statement from S&P on the ratings reads.
A credit analyst from S&P said the corporation expects enrollment to increase toward “pre-closure levels…of between 700-800 students.”
Sweet Briar has a total enrollment of 322 students in 2019, according to statistics from the U.S. News & World Report.
Reports from the college’s board of directors state SBC is aiming to have more than 600 students by fiscal year 2022. Also by 2022, the board is looking to reduce the proportion of operating revenue in its budget from fundraising down to 8% from 41% this school year.
“While I am gratified by the upgrade based on our managerial actions, I am deeply mindful that it was really an effort that involved the entire community,” Sweet Briar President Meredith Woo said in a Monday news release from the college. “At Sweet Briar, it is always about the students. The upgrade gives us confidence that we are on our way to serving our students to the best of our ability.”