Mesa State College defied the nation’s credit crisis and earned a top credit rating from a national financial analysis firm for the school’s outstanding debt and upcoming bonds financing the North Avenue residence hall.

Moody’s Investor Service assigned Mesa State an A3 rating, meaning the school is investment-worthy with little credit risk. The report issued by the rating agency credited the school’s strong position as a “regional education provider” and growth in financial resources as some of the strengths of Mesa State’s credit-worthiness.

“The stable outlook reflects Mesa State’s important role in providing regional educational delivery services, good reserves, and strong operations enabling the college to absorb debt service even as it becomes increasingly leveraged,” the report said.

The school faces challenges, however, that could affect its rating, the report said.

Mesa State’s core market of western Colorado is booming economically, the report said, which could affect enrollment if potential students decide to enter the work force immediately after high school rather than attend college.

The school’s enrollment, about two-thirds of which is from the three counties surrounding Grand Junction, has remained essentially flat, the report said, because of growing energy and construction industries.

Net tuition per student has grown steadily, however, for Mesa State.

Another challenge the school faces is the loss of its enterprise status, the report said. The enterprise designation, meaning Mesa State would receive less than 10 percent of its revenue from the state, allows the school to pledge 10 percent of tuition revenues to its outstanding bond debt.

Mesa State qualified for enterprise status from 2005 through 2007, but lost it for 2008 after a large state appropriation that put it over the 10 percent limit.

Debt from the bonds financing the housing complex will not be paid with enterprise revenues until the school qualifies for the designation, which is expected in the next several years.

Mesa State sought the Moody’s rating prior to issuing $29.8 million in bonds to fund the North Avenue Residence Hall.

The school has debt from previous bonds over the past six years, the report said, and it has a higher credit rating than companies such as Financial Guaranty Insurance Co., with its poor credit, B1 rating and negative outlook. FGIC is one of three companies that have insured the school’s bonds against default but have a lower rating than that of Mesa State.

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