OREANDA-NEWS. January 20, 2016. Fitch Ratings has affirmed its 'F1+' rating on the following debt issued by the Maryland Health and Higher Educational Facilities Authority (MHHEFA) on behalf of Johns Hopkins University (JHU):

--\\$69.27 million variable-rate revenue bonds, series 2005A;
--\\$400 million taxable and tax-exempt commercial paper (CP) program.

SECURITY

The revenue bonds and CP are unsecured general obligations of JHU.

KEY RATING DRIVERS

UNIVERSITY CREDIT STRENGTH: The university maintains a strong financial profile, demonstrated by consistently positive operations; substantial balance sheet resources; robust fundraising; and a manageable debt burden. Fitch maintains a long-term 'AA+' rating on JHU's outstanding MHHEFA revenue bonds with a Stable Outlook.

RESOURCE SUFFICIENCY: The 'F1+' rating is based on JHU's ability to cover maximum potential liquidity demands presented by its variable rate debt programs by at least 1.25X from internal resources. Such resources include cash; highly liquid investments; and dedicated liquidity facilities.

RATING SENSITIVITIES

FINANCIAL DETERIORATION: Erosion of John Hopkins University's internal resource base or its general credit profile to the point where the university could no longer sufficiently cover its variable-rate obligations, while unlikely, would put downward pressure on the rating.

CREDIT PROFILE

Founded in 1867 and based in Baltimore, JHU is a private university that is internationally recognized for excellence in research. The university had a headcount of 23,073 students enrolled in its various undergraduate, graduate and professional divisions in fall 2015, with full-time equivalent enrollment of 17,152. Student quality indicators and various demand statistics remain strong, as evidenced by a fall 2015 weighted average SAT score of 1463 for matriculated students, an acceptance rate of just 13%, and a matriculation rate of 40% (vs. 39% the prior year).

JHU's strong financial profile is characterized by consistently positive operations; substantial balance sheet resources; strong fundraising ability (the last campaign closed in 2008 having raised \\$3.7 billion with strong progress to date on the current \\$4.5 billion campaign); and a manageable debt burden. These strengths are somewhat tempered by the university's revenue concentration in federal research funding, which makes up more than half of total unrestricted operating revenues.

JHU also benefits from the strong competitive and financial position of the Johns Hopkins Health System (revenue bonds rated 'AA-', Stable Outlook by Fitch), an independently governed and incorporated health system that includes Johns Hopkins Hospital, the primary teaching facility for the JHU's School of Medicine.

AMPLE INTERNAL SUPPORT FOR VARIABLE RATE DEMAND OBLIGATIONS

JHU is required to maintain internal liquidity to support a potential failed remarketing of VRDBs and/or inability to successfully rollover CP. As of Dec. 31, 2015 the university's total self-supported obligations included \\$69.3 million of VRDBs and \\$400 million (maximum authorization) taxable and tax-exempt commercial paper programs. To conservatively manage calls on the university's liquidity, CP is structured such that no more than \\$50 million matures on any given day and a maximum of \\$100 million over any five consecutive days.

As of Dec. 31, 2015, JHU identified approximately \\$2 billion of liquid resources available for this purpose, including dedicated liquidity facilities with a combined capacity of \\$260 million. Total resources decline to approximately \\$1.87 billion after adjusting for quality and duration per Fitch's criteria (adjusted resources) but still provide very solid 3.99x coverage of all self-supported variable rate debt obligations. Fitch views the university's strong coverage positively, as it is well in excess of the 1.25X criteria requirement.

For additional information, see 'Fitch Rates Johns Hopkins University's (MD) Revenue Bonds 'AA+'; Outlook Stable' dated Jan. 30, 2015.