Diddy Played A Part In Helping To Boost Howard University's Credit Rating In The Municipal-Bond Market, Report Says

As AfroTech previously told you, Diddy pledged $1 million to the historically Black university at the BET Awards 2022. Before that, philanthropist MacKenzie Scott made a hefty $40 million donation.

Now, a report released by Moody’s Investors Service reveals total cash and investments to Howard soared to $880 million, a 21 percent increase, in the fiscal year 2021, with the endowment return, federal support, and total gift revenue of $64 million supporting the rise.

Moody’s has now changed Howard’s issuer rating to Ba1 from Ba2 after assessing the university’s operating performance, enrollment management, revenue, and liquidity gains.

“The upgrade of the issuer rating to Ba1 incorporates the university’s improving operating performance, more effective enrollment management, revenue growth and liquidity gains. Increased federal, state and private funds for Howard reflects a shifting societal trend for greater philanthropic and governmental financial support of the mission of minority serving institutions, a supportive credit element and key driver of the rating action,” said Dennis Gephardt, lead analyst at Moody’s, according to the report.

In addition, Howard’s outlook rating has been updated to negative from stable. The upgrade applies to an estimated “$49 million of Revenue Bonds (The Howard University Issue), Series 2011B (Taxable).”

“The university had roughly $622 million of total debt as of June 30, 2021,” according to Moody’s.

The stable rating was given to Howard as Moody firmly believes its operations will remain consistent and support Howard’s increasing debt service and $785 million capital plan.

The outlook assumes incremental debt combined with the donor, partner, and public support will aid in the university’s $785 million capital plan.

“It really brings awareness, not just in terms of Howard as a brand, as a top higher education institution in terms of ranking, but also its mission in terms of being one of the premier HBCUs in the country,” Stephen Graham, Howard’s chief financial officer told Bloomberg.