S&P Global Ratings upgraded the University of Florida’s debt outlook from stable to positive due to its market position and financial surpluses, while affirming various long-term ratings on its revenue bonds.

S&P Global Ratings upgraded its outlook on the University of Florida’s debt this week from stable to positive, citing the institution’s market position and financial surpluses.

The agency affirmed its ‘AA+’ long-term rating on UF’s student activity fee revenue bonds, ‘AA’ rating on research revenue bonds, and ‘AA-‘ rating on dormitory and parking facility revenue bonds. S&P Analyst Laura Kuffler-Macdonald attributed the revision to UF’s surplus operations, and strong balance-sheet metrics. The revised outlook applies to the debt issued by the Florida Board of Governors for the university.

“This good news from S&P emphasizes an important point that should make Gator Nation proud: the University of Florida is in a strong position to do great things,” said Mori Hosseini, UF Board of Trustees chair. “We are committed to excellence and careful stewardship of the tremendous investments that the state of Florida has made. We are grateful for the state of Florida’s continued support and dedicated to working together. The future is bright.”

Despite a recent presidential change, S&P noted that an upgrade to ‘AAA’ is possible if UF maintains its resource levels relative to debt and clarifies its capital plans.

Research revenue bonds, on par with a bond held by Bank of America, are secured by reimbursements from research grants. Although UF had planned to issue up to $250 million in new debt for a research building, these plans are under review by new leadership. The dormitory and parking facility revenue bonds are rated two notches below the ‘AA+’ student activity fee bonds due to their more limited revenue pledges.

At the end of June, UF’s total debt was $516 million, rising to $567 million with additional debt issued after fiscal 2023. Approximately 27 percent of this debt is held by a UF direct support organization, with the remainder being fixed rate. The university also has $20.7 million in leases and subscriptions, with no swap contracts outstanding.