Henderson State University in Arkadelphia is benefiting from its incorporation into the Arkansas State University System, according to a recent report.
Moody’s Investor Services has assigned an A1 rating for $42.2 million in bonds for Henderson and $24.4 million in bonds for Arkansas State University in Jonesboro that will be refinanced to generate cost savings for the institutions, the ASU System announced.
Moody’s also issued a “stable outlook” for the ASU System that reflects “gradual recovery at Henderson, including improvement in financial performance and liquidity.”
Since the financial restructuring that resulted from ASU System membership beginning in 2021, Henderson State has seen its rating rise two levels, from A3 to A1. Previously, its long-term bond financing was downgraded from A3 to Baa2 and given a “negative outlook” after the disclosure that capital reserves had been depleted in June 2019. Following the sale of Series 2022 bonds, the previous rating for Henderson will be withdrawn.
“This is a strong, third-party validation by a very reputable global research firm that we are taking steps in the right direction financially with Henderson State,” said Dr. Chuck Welch, president of the ASU System. “I’m proud of the work of our entire financial and leadership team at Henderson, our system office and A-State. They are working hard to get Henderson on sound financial footing.
“Our employees at Henderson are enduring painful furloughs and salary cuts right now,” Welch added. “Chancellor Chuck Ambrose and I are grateful for their sacrifices as they continue to provide the best possible education and services for our students. The recovery will continue to take time, but I’m confident we’re on the right path.”
Arkansas State’s bonds were affirmed as A1 based on its “diversified student market role and overall strong operating performance,” according to Moody’s.
“The sound financial practices of A-State and our two-year institutions were critical to this rating and outlook,” Welch said. “They have successfully built cash reserves required for an A1 rating and budgeted carefully through the years. We will continue to make quality higher education as affordable as possible for our students while controlling costs.”