|Northern Kentucky University retains its A1 credit rating by Moody's Investor Service.|
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Northern Kentucky University (NKU) has retained its A1 credit rating in the latest report by Moody's Investors Service, confirming NKU’s stable financial future.
The decreased pension payments to the Kentucky Employees Retirement Systems (KERS) was a contributing factor to NKU’s A1 ranking. With the decision to exit KERS last year, NKU will reduce its future pension payments by $4.5 million each year.
"NKU was spending over 8.5 percent of its operating budget on pension payments for the combined defined benefit and defined contribution plans before the university opted out," said NKU Chief Financial Officer Mike Hales. "With the university now spending significantly less on pension benefits, NKU can use that money for a plethora of other uses.”
The rating solidifies NKU’s financial stability by exchanging uncertain future pension contribution increases for consistent bond payments over the next 30 years.
"The rating also has long-term financial implications for NKU," Hales continued. "If NKU chooses to take on any future debt for whatever reason, it will keep the university’s borrowing costs low as the A1 rating means we are a low credit risk."
NKU has been rated A1 since 2010. The entire Moody’s report can be read online with a subscription.
For more information, visit the Northern Kentucky University website.