The rating on Connecticut Health and Education Facilities Authority's bonds, issued for Sacred Heart University (SHU), reflects: A weak balance sheet, confirmed by low levels of liquidity compared to both operations and debt; Limited revenue diversity, highlighted by a strong tuition dependency; and Sizable financial leverage, evidenced by a relatively high debt burden. Additional factors considered include stable demand trends and positive operating performance, with annual operating surpluses ranging between 2%-5% over the past five years. The series 1996C bonds are secured by a GO pledge of the university. SHU relies heavily upon tuition receipts, equaling 70% of operating revenues. While tuition discounting is high at approximately 23%, SHU has a well-established financial aid program and has seen net tuition
