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Home News 2015 Clark Atlanta University's Outlook Stable, Moody's Investor Service Says

Clark Atlanta University's Outlook Stable, Moody's Investor Service Says

Posted on Thursday, September 24, 2015


Donna L. Brock

ATLANTA (Sept. 24, 2015)—Clark Atlanta University (CAU) today received notice of its credit rating review by Moody’s Investor Service indicating a stable outlook, despite a downgraded bond rating of Ba2 from Ba1.  The outlook indicates that, despite economic pitfalls and market volatility, the University has grown its enrollment, significantly reduced its debt and positively impacted its ability to generate increased revenues.  Moody’s considers these factors strengths.

In a summary report, Moody’s indicated that the University demonstrated two consecutive years of revenue growth and an increase in Fall 2015 enrollment that exceeded budget projections. The report also cited CAU’s ability to manage expenses in line with changing revenue, with federal grants and contracts providing a degree of revenue diversity.

The downgraded rating is based upon what Moody’s calls “heightened competition…in an increasingly competitive higher education landscape,” one dotted with low-cost public institutions and wealthier private institutions, compounded by CAU’s market niche as an historically black university.  CAU President Ronald A. Johnson notes “the competitive climate in higher education means that the bar is higher for all institutions, especially private institutions.”

University’s New Leadership Focused on “Mobilizing for the Future”

Johnson assumed the presidency of Clark Atlanta on July 1, 2015, and, prior to Moody’s assessment, had already begun refocusing efforts toward achievement of the University’s mission by “mobilizing for the future.” Steps toward that goal include launching a series of efforts intended to raise top-line revenues, stemming from enhanced efforts in recruitment, enrollment and retention; dramatically enhanced institutional capabilities and capacity; and sharpening CAU’s value proposition to attract more students—through planning for the academic programs and Centers of Excellence that will distinguish the University from its peers, not only among HBCUs, but within the competitive environment in higher education in general.

In keeping with these efforts, Johnson recently announced the Oct. 5 arrival of a new associate provost who will focus exclusively on recruitment and enrollment and how these will connect with the academy to ensure students’ academic and career success.  Furthermore, the new president is working with a team of consultants to improve and expand the capacity of the University’s institutional advancement and fundraising operations. Moreover, Johnson will soon unveil a paradigm-changing shift in CAU’s undergraduate curriculum, designed to provide competency-based outcomes that increase students’ market competitiveness. The president’s efforts also extend beyond the campus footprint.  He has personally committed to an aggressive outreach program to cultivate and engage relationships with alumni, the University’s board of trustees, corporations, foundations and endowments.

Johnson notes that Clark Atlanta actually made significant gains given its position in an increasingly competitive niche market—in addition to being a private university, CAU is one of the nation’s top historically black colleges and universities.  “Still,” he says, “we are moving beyond the previous trends reflected in Moody’s current assessment and are now focusing squarely on ‘metrics that matter.’ Decisive, strategic and tactical changes are being implemented to move Clark Atlanta to the next level of competitive advantage while adjusting our business model to reflect the realities and challenges of the 21st century for our graduates, as well as for the institutions of higher education that produce them .  This refocusing,” he added, “will enable us to elevate our position not just as a great HBCU, but as one of our nation’s truly great research universities.”

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President Johnson's response to Moody's rating review.

Category: Administration
Keywords: CAU, Bond Rating