Written by Fran Lawrence.

A bond rating is an independent assessment of a bond’s credit quality, typically a letter grade (e.g., AAA, AA, A) that signifies the likelihood of a borrower, like a university, defaulting on its debt. 

A strong bond rating is crucial for a university’s financial health and operational success. It’s a key indicator of the institution’s creditworthiness, similar to a personal credit score, but on a much larger scale. This rating, assigned by agencies like Moody’s, S&P Global, and Fitch, reflects a university’s ability to meet its financial obligations. A high rating signals to investors that the institution is a low-risk borrower, making it easier and less expensive to secure funding.

In July 2025, S&P Global raised its long-term rating from ‘AA’ to ‘AA+’ on NC State’s general revenue bonds. Per S&P Global, “the upgrade reflects our view of NC State’s stronger demand profile, with enrollment growth and increased selectivity in recent years. The university has also generated material growth in financial resources under a strong finance team.” 

The recent rating upgrade for NC State demonstrates the positive results of the university’s strong performance. This is a good example of how positive institutional trends can translate into a better bond rating, potentially leading to lower borrowing costs and more resources for the university’s mission.