OREANDA-NEWS. S&P Global Ratings assigned its 'A+' rating to Delaware County Authority, Pa.'s series 2016 bonds, issued for Villanova University. At the same time, we affirmed our 'A+' long-term rating, issuer credit rating (ICR), and underlying rating (SPUR) on the university's outstanding debt. The outlook on all ratings is stable.

We assessed Villanova's enterprise profile as very strong with growing enrollment, high retention, increased applications, and improved selectivity, although matriculation remains somewhat weak. We assessed Villanova's financial profile as very strong, with a history of robust operating surpluses, moderate financial resources and adequate pro-forma MADS burden. Combined, we believe these credit factors lead to an indicative standalone credit profile of 'aa-.' As our criteria indicate, the final rating can be within one notch of the indicative credit rating. In our opinion, the 'A+' rating better reflects the university's slightly weaker enterprise profile and lower financial resources relative to the 'AA' rating category medians and peers.

The rating reflects our view of the university's following strengths:

Historically solid enrollment and demand as evidenced by growing enrollment over the past four years, growing applications, and maintenance of high retention with good student quality; Solid financial operations with consistently good operating surpluses on a full accrual basis, which is expected to continue for fiscal 2016; Improving financial resources relative to operations and sufficient financial resources relative to debt expected for fiscal 2016; andAverage pro forma maximum annual debt service (MADS) burden of approximately $25 million, equal to 5% of fiscal 2015 adjusted operating expenses, and predictable, conservative, front-loaded fixed-rate debt structure. The rating reflects our view of the university's following weaknesses:

Limited revenue diversity, with more than 87% of gross revenues in fiscal 2015 coming from student-generated revenues (tuition, fees, and auxiliaries), which we expect to remain similar in fiscal 2016; andSignificant debt issuance associated with a residence-hall construction project (series 2015 that will be reflected in the fiscal 2016 audit) that weakened financial resources relative to debt slightly. Proceeds from the series 2016 bond issuance will be used to partially refund the series 2010 bonds. The bonds are secured by a general obligation of the university and will amortize over 30 years. We do not anticipate that the university will issue additional debt.

The stable outlook reflects our expectation that over the next two years, the university will continue to produce good operating surpluses and maintain a selective demand profile and financial resource ratios that are in line with the upper end of the 'A' category. The outlook further reflects our expectation that the university will not issue additional debt beyond current levels.

We would consider a positive rating action over the two-year outlook period if there was significant growth in financial resource ratios relative to operations and debt that were more in line with 'AA' rating medians, and improved with selectivity and matriculation that is comparable to 'AA' medians and peers.

We would consider a negative rating action over the two-year outlook period if operations weakened significantly or financial resource ratios deteriorated substantially. We would also view a weakening of the demand profile or additional debt issuance without commensurate growth in resources negatively.

Villanova University is an independent, coeducational institution in Radnor Township, about 14 miles west of Philadelphia.