Standard&Poor's Ratings Services affirmed its 'A+' rating, with a stable outlook, on Pennsylvania Higher Educational Facilities Authority's series 2012 and 2010 revenue bonds, issued for Thomas Jefferson University (TJU). In our opinion, TJU's very strong demand profile, historically positive full-accrual surpluses, good revenue diversity, and good working relationship with Thomas Jefferson Hospital support the rating and provide a sufficient offset to financial resources we consider adequate compared with category medians. We believe increased discounting; lower sponsored research funding; and rising reimbursement risk and expenses related to Jefferson University Physicians (JUP), the university's multispecialty physician group practice, including salaried faculty members, could further pressure operating performance. We will continue to monitor management's cost-containment efforts aimed at improving operating margins.
