The Aa3 rating is the highest for any academic institution in Alabama, matching the bond rating for the state of Alabama.

"These ratings reflect the investment community's increasing confidence in the financial status both of the university and its athletic department," said Don Large, AU executive vice president. "The Board of Trustees' strong fiscal oversight of scarce resources during the 1990s to the present was instrumental in our success."

The 2004 general fee revenue bonds are secured by the revenues from all tuition and fees charged to students, except athletic and special building fees. Proceeds will be used to fund various campus improvement and renovation projects.

The 2004 athletic revenue bonds are secured by athletic department revenues, including university-wide, mandatory student athletic fees, sporting event ticket sales and media broadcast rights.

Moody's has also reaffirmed its ratings on several existing AU bond issues, including Aa3 ratings on three general fee bond issues and A1 ratings on two athletic revenue bond issues, a housing refunding bond issue and a student facilities bond.

Moody's cited five AU strengths for both the new ratings and the affirmations older bonds' ratings. These included:

**AU's strong student market position in the "vibrant" Southeast;

** The "expected conclusion of probationary status" with the Southern Association of Colleges and Schools;

** Adequate financial resources relative to debt;

** Excellent operating performance; and

** Solid debt service coverage from pledged revenues.