Proceeds will be used to finance the construction of a four-story student housing facility on the north end of the campus. Operational revenues from all student-housing facilities at the university are used to secure bonds.
Standard & Poor also affirmed its 'A' underlying rating on the Board of Trustee's series 1999A general fee revenue bonds, also issued for the University of Alabama at Huntsville. The outlook on those bonds is stable.
The rating on the series 2001 bonds reflects improved state support after several years of limited appropriations; the university's niche in technology education and its proximity to several high tech facilities, including a major research park and a NASA facility; as well as a track record of operating at a surplus, according to a prepared analysis from Standard & Poor's.
From 1995 to 1998,state funding remained flat at $34-35 million, about 57% of unrestricted current fund revenues. Funding increased 5.4% in 1999, but dropped 4% in fiscal 2000. Despite a history of weak state support, the current fund has remained sound, with consistent surpluses of 6% to 10% over the last five years.
Offsetting rating factors include fluctuating freshman applications numbers, limited selectivity, and a limited geographic pool of potential applicants. Freshman applications, for example, regularly rise or fall by 10% or more each year, and selectivity also is volatile, the S&P report states.
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