Standard&Poor's Ratings Services revised its outlook to negative from stable and affirmed its 'AA+' long-term rating and underlying rating (SPUR) on the University of Southern California's (USC) outstanding debt. In addition, Standard&Poor's assigned its 'AA+' long-term rating to the California Educational Facilities Authority's revenue bonds series 2009A, issued on behalf of USC. In our opinion, the negative outlook reflects: Significant operational risk associated with the acquisition of two hospitals and other capital projects; Substantial pro forma debt of $991 million, which results in very low financial resources for the rating category as fiscal 2008 unrestricted resources of $2.6 billion cover only 1.2x operating expenses and 2.6x pro forma debt; and Debt structure with several large bullet
