Idaho
Phoenix fallout? Moody's places University of Idaho's bond rating under review – Idaho Capital Sun
This story was originally posted on IdahoEdNews.org on Feb. 19, 2024.
The $685 million University of Phoenix purchase could trigger a “multi-notch downgrade” in the University of Idaho’s bond rating, according to a newly issued report.
A downgrade could affect $130 million in existing U of I debt, according to an analysis from Moody’s Investors Service, a firm that issues credit ratings on public entities and private corporations worldwide.
U of I officials have long acknowledged that the Phoenix purchase could cause a downgrade. But they have also downplayed the risk, saying the university would be on the hook for no more than $10 million a year for bond payments. Four Three Education — a U of I-affiliated nonprofit — would finance the purchase, and university officials expect Four Three to comfortably cover bond payments.
But Moody’s is skeptical.
In its report, issued Wednesday, Moody’s voices uncertainty about Four Three, and says the purchase still represents “a substantial increase of U of I’s total debt and leverage profile.” The report also refers, obliquely, to Phoenix’s “various legal and regulatory liabilities.” Consequently, purchasing the for-profit online university could expose the U of I to “potential future legal action” from the U.S. Department of Education.
The U of I currently has an A1 bond rating — a low risk, according to Moody’s rankings. Moddy’s had considered the U of I’s rating “stable,” before putting the rating under review last week.
And the review puts the U of I in a financial fog.
“We don’t have nearly enough detail to know where this could land,” Emily Raimes, a Moody’s associate managing director, told The Bond Buyer, a publication focused on municipal finance. “We just wanted to signal that (a downgrade) could be more than one notch. We try to be transparent, and if it’s capped at one notch, we would say that.”
In a statement, the U of I said it would not address the specifics of the report until Moody’s “has a full understanding of this transaction.”
“University of Idaho has been expecting a reevaluation of our rating based (on) our desire to affiliate with University of Phoenix,” the U of I said in its statement. “It is unfortunate that Moody’s news release relies on false assumptions founded in uninformed public statements and incorrect media reports.”
Financing is one of several obstacles facing the U of I and Phoenix, as they hope to close the sale within the next few months.
An Idaho House committee introduced a resolution Thursday urging the State Board of Education to reconsider its support of the Phoenix purchase — threatening a possible lawsuit. And Attorney General Raúl Labrador has threatened to appeal a recent Ada County District Court ruling, which said the State Board’s closed-door discussions of the Phoenix purchase were legal.
More reading: Click here for our in-depth and up-to-the-minute Phoenix coverage.
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Shanea Fulks is the owner of Seven Sisters Closet Revival, a new consignment store at 260 South Woodruff in Idaho Falls. Take a look inside in the video above. | Rett Nelson, EastIdahoNews.com
Do you want to know what’s happening in the eastern Idaho business scene? We’ve got you covered. Here is a rundown of this week’s business news across the valley.
BIZ BUZZ
IDAHO FALLS
New consignment shop in Idaho Falls offers vintage clothes for customers and booth space for sellers
IDAHO FALLS – Curating vintage clothing is Shanea Fulks’s passion, and she’s sharing it with the community through a new business venture.
Seven Sisters Closet Revival opens Saturday at 260 South Woodruff inside Parkwood Plaza in Idaho Falls. It offers racks of vintage clothes for customers and booth space for others to sell their items.
“You get a rack with shelves, and you can come in throughout the week and sell things,” Fulks tells EastIdahoNews.com. “The things you’ll see in the middle of the store are pieces that I have curated. I hand-pick all the things I bring to the store.”
See some of the items in the video above.
Fulks says she’s had multiple people walk in already who are excited about the shop.
The store will have a grand opening this weekend. Fulks is partnering with the Greater Idaho Falls Chamber of Commerce for a ribbon-cutting and open house at noon on Friday. A local band will be performing during the event.
Then on Saturday, a grand opening celebration will begin at 2 p.m. Several vendors and live entertainment will be available. Fulks says she’s looking forward to interacting with the community.
Fulks has been selling items from her personal collection online for years. After helping a mother and daughter find a formal dress during an interaction at another shop in town several years ago, Fulks says she realized there was a need for a store like this.
After about a year of working with real estate agents, Fulks says the Parkwood Plaza space formerly occupied by a beauty salon called Blush became available, and it was an ideal fit.
“It’s just been a whirlwind and we’re just trying to get it going,” says Fulks.
Fulks’ interest in fashion stems back to childhood. She lost her dad and stepdad to suicide at a young age and grew up in a household that struggled to make ends meet. As a result, she says they bought clothes at Goodwill and other secondhand stores.
She remembers being made fun of because of the clothes she wore. In time, she learned to embrace her uniqueness and developed an interest in vintage clothes.
“I’ve just always been attracted to old sweaters, military jackets (her dad served in Vietnam),” Fulks says. “I like to help people feel confident wearing something unique, even if it’s not trendy. Be bold and wear whatever you want.”
The idea of making the most of your circumstances and embracing who you are is inspired by her experience with suicide, and it’s reflected in the art that’s on display in her store.
“Part of the theme in my store is ‘Stay. We need you,’” she says.
The business name refers to her family. She comes from a blended family of six girls and four boys. When she and her husband were married, they had a daughter — the seventh sister.
Fulks says she’s looking forward to offering great deals to customers. She has two sons with autism who love art, and she wants to host art-themed events for people with special needs. She’d also like to host tea parties and other events in the future.
“I want people to come and feel like they belong,” she says. “I’m going to allow people to do karaoke. When you’re here, I want you to feel like you can have fun.”
Seven Sisters Closet Revival will be open from 10 a.m. to 7 p.m. Monday through Saturday.
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Gov. Brad Little has signed House Bill 533, which would remove the need for license plate stickers on Idaho vehicles.
The legislation, introduced earlier this session by Rep. Jon Weber (R) of Boise, eliminates the requirement for registration stickers on Idaho license plates. Weber stated during the bills intorduction that officers can verify the status of license plates without the stickers, potentially saving the state around $300,000.
During the bill’s introduction, some lawmakers argued that it could increase the workload for law enforcement.
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The new law is set to take effect in July.
For the second year in a row, House lawmakers will consider urging the U.S. Supreme Court to overturn its ruling legalizing same-sex marriage.
The nonbinding resolution, which carries no legal weight, says the decision in Obergefel v. Hodges violates the longstanding religious definition of marriage between one man and one woman.
“The current definition of marriage that allows for same-sex marriages is a defilement of the word marriage,” said Rep. Tony Wisniewski (R-Post Falls), who sponsors the measure.
The resolution further states that the Obergefel decision “arbitrarily and unjustly” rejects the historical definition of marriage.
Idaho voters passed a constitution amendment in 2006 that defines marriage as between one man and one woman, which was invalidated by the Obergefel ruling.
Wisniewski said regulating marriages should be a power left to the states.
Rep. Brent Crane (R-Nampa) agrees.
“If you want to get things … closer to the people with respect to some of these more complex social issues, I think the best place for those things to happen is in the states,” Crane said.
Doing so is a risk, he said.
“You may have states that choose to acknowledge [polyamorous relationships]. You may have states that choose to have relationships between adults and younger children,” Crane said.
Cities in neighboring Oregon and Washington, for example, are considering giving those in polyamorous relationships legal recognition.
But he said that risk is worth it to allow other states that choose to only recognize traditional marriages.
Four lawmakers on the House State Affairs Committee opposed the resolution.
Rep. Erin Bingham (R-Idaho Falls) said she’s tried to balance her own religious beliefs with those of others while considering the measure.
“I do feel like that it is important for us to work together, to find ways to compromise and to live together in peace and mutual respect,” Bingham said.
The resolution now goes to the House floor for consideration.
House lawmakers last year passed a similar measure, but it never received a hearing in a Senate committee.
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